Software is eating the world, but...

"Software is eating the world", for sure. Those are words from Marc Andreessen - the Netscape founder (and now principal at A16Z, Andreessen Horotiwtz). To unpack this statement a little bit, the claim is that software will disrupt any and all industries, and that — in some real way — all problems are software problems. This idea has a lot of sway out in Silicon Valley, and proponets use the examples of software eating the hotel industry (airbnb), or software eating the taxi industry (uber), or software eating the grocery industry (instacart).

But here's a McKinsey Report (The social economy: unlocking value and productivity through social technologies, McKinsey Global Institute, 2012) that details how disruption will unfold. It won't be linear nor spread evenly across industries. Some industries will be relatively harder to disrupt, while others will be easier. The chart above outlines who much value is in each industry and how easy it will be to capture that value. In the Andreessenian terms above, software will be much slower to eat energy, food production, retail, and construction.