Notes and Comments by Barney Pell

This document contains my notes taken as an audience member attending this panel discussion. While it might look like a transcript, and I attempt to capture everything in real-time, I do also interpret, paraphrase and summarize as I type.

Personally, I thought this was a great discussion, and one that should be shared with entrepreneurs, investors, vendors and customers in the software development community. I worked hard to make this article readable so that others can benefit.

Highlights and take-aways:

• John Mashley pointed out that, independent of all the improvements in software development tools, individual programmer productivity is always nonuniform. Some programmers are 10 or even 100 times as productive as others.

• This has negative and positive implications for outsourcing. On the negative side, if you can assemble a crack team of programmers locally who are 10x more productive than you can find offshore, then you actually lose economic value by outsourcing. On the positive side, some of the best developers are not local. So despite the hassle, and even if the labor rates are not much different, you can gain economic productivity by taking advantage of these fine programmers wherever they live (whether in India or on a boat in the Carribean).

• While outsourcing is increasingly becoming an imperative for businesses, the results of outsourcing are often disappointing. Steve Mezak discussed 7 major categories of mistakes in outsourcing and listed potential solutions (including methodologies and tools) for each.

• A recurring theme in the panel was the difficulty and importance of getting software requirements right. Despite all the improvements in tools and processees for developers, there have been limited improvements in the way people create and validate the requirements in the first place. Errors in requirements ripple through the downstream flow and get more expensive to fix the later they are caught. N8's David Hartford brought up the statistic that requirements errors cost US companies $100 Billion per year in rework and cancelled projects alone. Steve Mezak listed a new generation of companies (including N8) that address different aspects of the requirements problem in different ways. I am very familiar with N8's Scenario product that David discussed and demonstrated at the meeting. I think it has the potential to address the requirements engineering problem in a substantial way for the first time. (I intend to write more about this in a separate post).

• There was consensus that distributed development is now working. This has been one of the biggest problems with outsourcing, telecommuting, and large scale projects. There was discussion that open source tools have matured substantially and are now being integrated into cost-effective suites. In addition, VoIP (e.g. Skype) has enabled people to maintain open voice channels all day long at low cost. As Sam Jadallah said:

  I have a company with 2 people, on in Silicon Valley, one in Dublin. Skype sits open all day long, just like two people sitting in room together all day long talking whenever they want. The tools, workflow, process, and experience level is now working.

• Sam Jadallah's discussion of VC investment in software development tools is great reading. His fundamental point is that the internet has changed the economics of the enterprise software business, and that this changes the success factors for companies. Big enterprise software companies are suffering, and most of the large software industry revenues are coming from maintenance. Sam covers several major trends in software development and in software business models and provides concrete suggestions for what software startup companies should do differently. He lists interesting investment areas for software tools, including: developer productivity, quality and security, application management, and process improvement.