Mobile is growing, and it’s got a big appetite

Back in 2011, the influential technologist, investor and Netscape co-founder Marc Andreessen coined a phrase that has proven to be quite the mantra in technology circles – “software is eating the world”.

Admittedly, the phrase might be rather convenient for the notoriously self-absorbed technology industry, but it does capture how software has become central to pretty much all areas and industries. In his essay of the same name, Andreessen made the argument that software is no longer a mere tool to be used by various industries, and was becoming an intrinsic layer of our modern world, with major implictions.

“My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy,” he wrote. “More and more major businesses and industries are being run on software and delivered as online services – from movies to agriculture to national defence.”

A few weeks ago, Andreessen's partner at venture capital firm Andreessen Horowitz, Benedict Evans, delivered a presentation at the WSJD Live global technology conference that updated the concept: today, Evans argued, "Mobile is Eating the World."

The presentation and concept, I feel, will become every bit as influential as Andreessen’s original maxim. Evans’s slides are full of fascinating data on how the increasing ubiquity of mobile devices is affecting all sorts of industries, but it’s really in the accompanying audio that Evans reveals how we need to start thinking about that seismic change. The core shift in the dynamic, he says, is quite simple to grasp: “As we go to mobile,” he says, “for the first time the tech industry is now selling to everyone on Earth.”

That might sound self-evident when put so bluntly, but the common perception of mobile’s impact is far too limited. Part of that is our inability to fully comprehend mobile’s reach – by 2020, Evans predicts, there will be four billion people online globally, all using smartphones, or about 80 per cent of the world’s adults. And that spread will see developing world countries catch up in terms of internet access – with cheap Android devices and increasing 3G coverage, Evans suggests more than 60 per cent of sub-Saharan Africa will be connected by the end of the decade. That will have massive implications for a rapidly growing developing world economies.

But the rapid expansion in connectivity is only part of the story – it also fundamentally changes what it means to be online. Today in the US, more time is spent in mobile apps than on the web, which wasn’t the case even a year ago. Being online no longer equates to using a web browser on a PC or mobile device, with the leverage effects of mobile meaning that WhatsApp, with just 30 engineers, sends nearly as messages as all the traditional SMS messages.

And because of the swift rise mobile, media, apps and communications are commanding ever larger chunks of our time – according to Evans, only sleep can rival the time we spend engaged with our devices.

Mobile dwarfs the traditional PC industry, in every respect. Evans points out that in the iPhone 6 launch weekend, Apple sold 25 times more transistors than were in all the computers on the planet back in 1995. And Apple's entire business, largely relying on the iPhone, is close to eclipsing the entire PC business, a phenomenal turnaround for a company that was the perennial underdog for so long. And mobile now accounts for about half the global consumer electronics industry's revenues.

But beyond the sheer size, Evans’s presentation hints at how the ubiquity of mobile will be so transformative, and how it will ultimately “eat the world”.

First, he points out that "each wave of technology tends to create new business". As an example, he cites how trucking and highways were critical to the success of companies such as McDonalds and Walmart, but nobody thinks of them as transport companies. In terms of big companies seen as disruptive tech innovators, he points out that AirBnB, Uber and Lyft are "companies created by technologists, built on technology, enabled by technology, but AirBnB is a travel company, and Uber and Lyft are transport companies". The distinction between technology companies and, say, travel or transport companies is bound to fade.

Secondly, and elegantly illustrating the previous point, Evans uses a Google Ngram analysis of the frequency of different words in books since 1800, such as railways, steel, computerisation and software. In each case, their use rises dramatically as they disrupt pre-existing businesses and enable new industries to rise. But after a while, the frequency of their appearance in books declines dramatically – as Evans puts it, "When a technology is fully adopted, it tends to disappear." To "eat the world", then, is not simply about dominating and overwhelming other industries, but rather about becoming an invisible part of the fabric of our economies, and ultimately of our lives.