PwC:What do you see as the major issues for the software industry today?

Labana:There are two major forces that are reshaping the industry. One is consumerisation. The other is the shift to IT as a service.

PwC:How specifically is consumerisation affecting the software industry and its customers?

Labana:Take a look at the devices coming out in the market. The forces of consumerisation are causing this explosion to happen, and causing IT to ask how are they going to deal with it and how to live in a world where applications are embedded in a specific device. This heterogeneity of devices is driven by consumerisation.

PwC:There's been increased interest among IT organisations in the cloud. Why?

Labana:When you look at it from an IT-spend perspective, only about one-third of budget is spent on innovation. In the past, IT focussed the remaining two-thirds on operations through outsourcing but that strategy can take you only so far. There is a finite supply of smart people in the world and offshore talent is getting more expensive. Today, IT organisations have to think about how they buy and consume software, which leads to a SaaS [software as a service] model. With SaaS, the power lies in the fact that it can be turned off when it's not in use. What the cloud is really about is transforming how data centres are going to be managed going forward. It will become a consumption-based model.

PwC:Smartphones and tablets have gotten popular quickly, but that means more platforms for software developers to support. Can they really do so?

Labana:We see three major classes of devices: small screen, medium screen, and large screens smartphones, tablets, and PCs respectively. People will want to consume on all three types of screens, and they will have more than one kind of device. However, corporations are largely using Windows applications written for the large screen, and they aren't going to take the expense or time to rewrite applications for new devices. The conundrum is that users have all these micro-applications on their devices while corporate applications are locked down.

Our approach is to extend the reach of the Windows applications onto these other devices whether they are smartphones, tablets, Macs or Linux machines. But using Windows applications in these other contexts is not always successful, so we're investigating how to make them act more natively on these other devices. Can you re-skin Windows applications that are meant to run on a PC so they act like native iPhone applications, for example? We're experimenting with that. Another approach is to have multiple "personalities" on a device such as a laptop; one for work, one for personal, for example. We loosely call that virtualising the desktop.

PwC:So what does this mean for the stable, fairly homogeneous systems in place at most businesses?

Labana:The whole concept of what a desktop is will evolve away from the traditional Windows paradigm. The desktop is becoming a mash-up of resources from multiple sources that both IT and end users bring.

PwC:This must have profound implications for your customers. What are they?

Labana:The role of the CIO has to change to be "chief aggregation officer" for externally-provided services, and for data created by users. Their job will be to provide governance, and to conduct the business of information and data management, no longer focussing on the endpoint devices and network perimeters.

PwC:You've suggested that the model in the West of PC-based computing is not a global one. What lessons should software providers and Western businesses take from the rest of the world?

Labana:In India, China and Africa, the whole concept of a PC is not there yet people do micro-tasks routinely on phones. Today, that is largely unexploited by the software industry because the PC is a Western concept, so there's an opportunity for software providers in these other markets. Likewise, the labour in the BRIC [Brazil, Russia, India, China, and other emerging nations] countries is so cheap that people don't think about the labour costs when it comes to IT.

PwC:As people use multiple devices and access cloud-based services, the traditional model of installing a client license paid upfront seems to be an increasingly ill fit. How should software licensing and delivery change to the heterogeneous world you've described?

Labana:The IT world needs to move to user-based licenses, where you can charge by the user. There's also a consumption-based side. Software will be sold much more in a utility-based model, as a service. That's just beginning to happen.

Apple is a big disruptor here as well in the way users get applications. It just opened the new Mac App Store in January. There is an assumption today that IT provides the applications that users have in a predetermined way, but app stores like those created for smartphones and now the Mac, change this model. There is a whole generation of people who have been trained to use a self-service model, getting apps by themselves without the help of an IT department. In this new model, people will pick what they need from a warehouse of applications like an iTunes App Store. It's a trend that is bigger than any particular vendor.