According to news on August 21, Beijing time, Netscape founder and famous Silicon Valley investor Marc Andreessen recently published an article in the Wall Street Journal called "Software is Eating the Whole World" saying that today's Software applications are everywhere and eating the world. This article analyzes the current development trends and reasons of the technology industry, and the final conclusion is that "this is a great opportunity, and I understand where to invest my money."

Here is the full text of this article:

This week, HP (of which I am a director) announced that it will abandon its currently struggling PC business and instead focus on Software business with greater growth potential. At the same time, Google announced the acquisition of mobile phone manufacturer Motorola Mobility. The two moves shocked the technology world, but they were also in line with the development trends I have observed for a long time. Despite the current downturn in the stock market, this trend keeps me optimistic about future growth in the U.S. and world economies.

In short, software is eating the world.

More than 10 years after the Internet bubble burst in the 1990s, many new Internet companies such as Facebook and Twitter continued to emerge. Their valuations increased rapidly in the secondary market, and some even successfully conducted IPOs. These It’s sparking buzz in Silicon Valley. With the collapse of Webvan and Pets.com still fresh in investors' minds, people are asking, "Is the bubble back again?"

I and others have been asking Take the opposite view. (I am co-founder and lead partner of Andreessen-Horowitz, a Silicon Valley venture capital firm that has invested in Facebook, Groupon, Skype, Twitter, Zynga, and Foursquare, among many others. I am also an individual investor in LinkedIn.) We It is believed that many rising Internet companies are creating real, high-growth, high-margin and highly defensible enterprises.

The current capital market is not keen on technology companies, and the price-to-earnings ratios (P/E) of some major listed technology companies are unprecedentedly low. For example, Apple has huge profit potential, occupies a dominant market position, and in the past two weeks its market value has surpassed Exxon Mobil to become the largest company in the United States. However, its P/E is only 15.2, which is comparable to the broader stock market. Perhaps the most telling thing is that when everyone is screaming about the "new bubble", the bubble will not actually appear.

However, too much of the current debate revolves around the valuation of Silicon Valley's best new companies, rather than the intrinsic value of these companies. I believe we are in the midst of an exciting and widespread technological and economic transformation in which software companies will account for a large portion of the economy.

More and more large enterprises and industries will be inseparable from software, and network services will be ubiquitous, from movies to agriculture to national defense. Many winners will be Silicon Valley-style innovative technology companies that invade and overturn established industry structures. Over the next ten years, I predict that more industries will be disrupted by software, and that exceptional new Silicon Valley companies will be the main drivers of this trend.

Why is this happening now?

The computer revolution 60 years ago, the invention of the microprocessor 40 years ago, and the rise of the Internet 20 years ago. All these technologies eventually changed various industries through software and were widely promoted around the world. .

More than 2 billion people now have access to broadband Internet. Ten years ago when I was working at Netscape, which I co-founded, there were only 50 million people in the world with broadband Internet access. In the next ten years, I predict that there will be at least 5 billion smartphone users in the world, and everyone will be able to connect to the Internet in real time through their mobile phones, every moment of every day.

At the end, software programming tools and Internet-based services in many industries will make it easy to create global software startups without investing in new infrastructure and training new employees. In 2000, when my partner Ben Horowitz was the CEO of Loudcloud, the first cloud computing company, the monthly cost for a customer to run a basic Internet application was about $150,000. Now The monthly cost of running the same basic Internet application on Amazon is only about $1,500.

With the cost of starting a business falling and the huge market demand for network services, the global economy will become digital for the first time. This was the dream of every Internet visionary in the early 1990s, and now, after a generation of efforts, This dream has become a reality.

Perhaps the most dramatic example of software eating away at traditional industries is the demise of Borders and the rise of Amazon. In 2001, Borders agreed to hand over its online business to Amazon, believing that online book sales were non-strategic and insignificant.

Today, Amazon, the world’s largest bookseller, is a software company. The company's core strength is its amazing software engine that enables everything to be sold online, eliminating the need for physical retail stores. Additionally, as Borders was heading toward bankruptcy, Amazon revamped its website, driving its Kindle e-book sales to overtake physical books for the first time. Now, even books themselves are software.

Netflix, today the largest video service website in terms of number of users, is a software company. How Netflix drove Blockbuster to bankruptcy is already a story in the past, but now other traditional entertainment providers are also facing threats at the same time. Comcast, Time Warner and other companies are adapting to the trend and transforming themselves into software companies. The "TV Everywhere" service concept proposed by Comcast and Time Warner releases content from cables and instead connects it to smartphones and tablets.

Today’s monopolistic music companies are also software companies: Apple’s iTunes, Spotify and Pandora. Traditional record labels increasingly rely on supplying content to those software companies to survive. The music industry's revenue from digital channels totaled $4.6 billion in 2010, accounting for 29% of the total music industry revenue, compared with only 2% in 2004.

Today's fastest-growing entertainment companies are video game developers and still software companies. Five years ago, the video game industry market size was only US$30 billion, but now it has grown to US$60 billion. The fastest growing video game company is Zynga (it is the developer of the Facebook platform game FarmVille). Zynga develops all online games. Zynga's first-quarter revenue grew to $235 million, doubling from the same period last year. Rovio, the maker of the online game Angry Birds (which was close to bankruptcy when it launched an iPhone version of the popular Angry Birds game in late 2009), is expected to have revenue of more than $100 million this year. At the same time, the revenue of traditional video game developers such as Electronic Arts of the United States and Nintendo of Japan is stagnating and declining.

Pixar, the most brilliant new movie-making company in decades, is a software company. Disney acquired the software company to maintain its position in the animated film market.

Of course, photography has long been swallowed up by software. It is impossible to buy a mobile phone in the market without a software-driven camera, and the photos can be automatically uploaded to the Internet for permanent storage and shared worldwide.

Companies like Shutterfly, Snapfish and Flickr have invaded Kodak's territory.

Today’s largest direct sales platform is the software company Google. Now, it's joined by Groupon, LivingSocial, Foursquare and other companies that are using software to eat into the retail industry. In 2010, Groupon's revenue exceeded $700 million, and the company was only two years old.

Today's fastest-growing telecommunications company is Skype, a software company just acquired by Microsoft for $8.5 billion. CenturyLink, the third largest telecommunications company in the United States, has a market value of US$20 billion and had 15 million access users as of June 30, but its revenue is shrinking at an annual rate of 7%. Excluding revenue from acquired company Qwest, CenturyLink's revenue shrank by more than 11%. Meanwhile, AT&T and Verizon, the two largest U.S. telecom operators, have managed to stay afloat by transforming themselves into software companies and partnering with Apple and other smartphone makers.

LinkedIn is the fastest growing recruiting company today. For the first time ever, employees will be able to maintain their own resumes on LinkedIn, allowing recruiters to conduct real-time searches, a service that gives LinkedIn the opportunity to tap into the $400 billion recruiting market.

Software is also eating into the value chains of many industries that are widely considered to exist primarily in the physical world. In today's cars, software operates the engine, controls safety features, entertains passengers, guides drivers toward their destinations, and connects each car to mobile devices, satellites, and GPS networks. The ability for car enthusiasts to repair their own cars, largely through the use of software, has become a thing of the past. The trend towards hybrid and electric vehicles will accelerate the move to software, where electric vehicles are fully controlled by computers. Software-driven self-driving cars are already being developed by Google and some major automotive companies.

Walmart, currently the leading physical store retailer, uses software to improve its logistics and distribution capabilities and enhance its competitiveness. The same is true for the international express delivery group FedEx, whose trucks, planes and distribution centers form what is considered the best software network. Today and in the future, airlines' success or failure will depend on their ability to use software to correctly price tickets, optimize routes and revenue.

Oil and gas companies were early innovators in the supercomputers, data visualization and analytics industries that are critical to today's oil and gas exploration achievements. Agriculture is also increasingly driven by software, including satellite analysis of soil involving software algorithms for selecting seeds per acre.

The financial services industry has clearly been transformed by software over the past 30 years. Nearly every financial transaction, from someone buying a cup of coffee to someone trading $1 trillion in credit default swaps, is done through software. Many of the leading innovators in the financial services industry are software companies, such as Square, which enables anyone to accept credit card payments with a mobile phone, or Paypal, which achieved $1 billion in revenue in the second quarter of this year, up from the same period last year. 31.

I believe that the healthcare and education industries will then undergo a fundamental shift toward software. My venture capital firm is backing some great startups in these two huge and important industries. We believe that these two industries, historically resistant to change, are poised to be disrupted by great software-centric entrepreneurs.

Even a country’s Department of Defense is increasingly using software. Modern combat soldiers are integrated into software networks to provide intelligence, communications, logistics and weapons guidance. Software-driven drones enable aerial attacks without the dangers of human pilots.

Intelligence agencies use software to collect data on a large scale to discover and track possible terrorist threats.

Companies in every industry must prepare for the software revolution, including even those industries that already have a software foundation today. Currently outstanding software companies such as Oracle and Microsoft are increasingly threatened by new software products such as Salesforce.com and Android due to related problems.

In some industries, especially those with a deep physical world component like oil and gas, the software revolution will be a significant opportunity for existing companies. But in many industries, new software ideas will lead to the rise of new Silicon Valley-style startups that will invade existing industries with impunity. Competition between existing companies and software-driven startups will heat up over the next decade. Joseph Schumpeter, the famous economist who proposed the theory of "creative destruction," would be proud.

However, people who have watched their pension numbers change over the past few weeks may be skeptical, especially the idea that it will be a positive for the U.S. economy. It is no accident that many of the current large technology companies, including Google, Amazon, eBay, etc., are American companies. The combination of an outstanding research university, an adventurous corporate culture, strong innovation capital and sound business and contract law makes us unprecedented and unparalleled in the world.

However, we face several challenges.

First, every new company currently in the entrepreneurial stage is facing huge economic headwinds, making the challenges faced far greater than in the early 1990s. The good news about starting a company at this time is that success will be extremely powerful and adaptable. When the economy finally stabilizes, great new companies will grow even faster.

Second, many people in the United States and around the world lack the education and skills necessary to participate in the new companies emerging from the software revolution. It's a disaster, every company I've worked for has been absolutely starved of talent. Competent software engineers, managers, marketers, and salespeople can always find the high jobs and high salaries they want in Silicon Valley, even when unemployment is high in the United States. The problem is even worse than it seems, because many people working in some industries are currently on the wrong side of the software revolution and may never look back. Only education can solve this problem, and we still have a long way to go.

Finally, the new company needs to prove its worth. They must build strong cultures, delight their customers, create competitive advantages and demonstrate rising valuations. No one should expect that building a high-growth, software-driven new company in an established industry will be easy. This is actually extremely difficult.

I've had the pleasure of working with some great new software companies, and I can tell you that they do a really great job. If they perform to my and others' expectations, they will become a very valuable cornerstone company in the global economy, gaining access to a larger market than the technology industry has ever seen before.

Instead of constantly questioning the valuation of these new generation technology companies, let us try to understand how these companies are doing, what they are doing, what impact they have on businesses and the economy, and in order to be able to What can we do together to expand the number of these innovative new software companies in the United States and around the world.

This was a great opportunity and I knew where to put my money.