It's 2010 -- Do You Know Where Your Software Is?

"Games matter," said Chou, arguing that the collaborative, role-specific ways problems are solved in online games like World of Warcraft is just one key area where "a huge transition" is occurring in technology.

Chou also spoke of increasing specialization and service-orientation in software development and delivery during his presentation at "The New Software Industry" conference held Monday at the Microsoft Research campus in Mountain View, Calif.

"How do we get groups of people of diverse backgrounds to come together, achieve an objective and then go away? We've been trying for years to achieve that in business," said the former head of Oracle On Demand and author of "The End of Software."

"But that's exactly what happens in games like World of Warcraft. And what are the fundamental mechanics of World of Warcraft? Killers can't heal and healers can't kill. The game is engineered so that those two skills are necessary, so I can't go out and try to play on my own."

The next step, Chou said, is to "translate game networking into the 'world of work'."

"How do I look at someone that I might want to work with and know if they're a good writer or a good programmer? I can't tell now, but in the game it's obvious to see those qualities or skills in others," he said.

But that's just part of what the future holds, Chou said. He also argued that software will become increasingly service-oriented and specialized in the coming years.

"There's a kind of Moore's Law for software, which is a transition in the fundamental cost model for software," he said, describing cheaper means of delivery that are pushing hard on the traditional, software-in-a-box model.

"The old model cost about $60 to $70 to deliver, and you charged users $100 per month. A SaaS product like Salesforce.com costs about $7 per user to deliver software and you make $10, and down to a Google, which costs about $0.70 per user to deliver and you make $1.

"That's taking the cost model down by an order of magnitude every few years."

People have misread the success of companies like Amazon as based on cheaper prices, rather than better service, Chou said.

"Amazon has way better service than your local bookstore. It's not just on cost, but it's actually a better service, where you can get more information on what more other people think about a particular book, for example."

Chou said the next great opportunity for software developers may lie in probing the "Deep Deep Deep Web" of data stored behind firewalls and out of public view.

"The 'Surface Web' is about 100 terabytes, some say 150. On the 'Deep Deep Deep Web' about a million terabytes were sold in just one quarter last year by the major storage providers," he said.

"There's no link to those data. New ways are going to have to be found to probe it. An argument can be made that there are hundreds of Googles waiting to be founded doing vertical slices or probes into the Deep Deep Deep Web."

Specialization, too, will become the norm in software, he said.

"Nobody ever had to take a class on how to use Google," he said. "Compare that interface with the average business application. Google does just one thing, eBay just does auctions."

And there are now enough programmers in the world " 12 million, according to Chou " with enough specific, specialized needs to drive a revolution.

"Citibank has more programmers than Oracle. Lots and lots of people can author software and they're going to author specialized programs," Chou said.

"The future looks like tons of vertical, specialized software."