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11 Laws Driving Success in Tech, according to CB Insights [Part 5]

Modularity could pave the way for the future of the smart home

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Law of Modularity
Modularity

The complexity of technology is being broken down with adequate research. Just as the previous laws have driven us deeper, the law of modularity is one major law that has brought about compatible innovations which has birthed today’s digital scale. 

Law of Modularity: Why building blocks are essential to modern tech design

The entire concept of computers has changed,” wrote IBM in a brochure it released in 1964. It wasn’t exaggerating. The company was launching System/360, a new modular computer architecture that let customers select the speed, memory size, and processing features they needed with the option to upgrade and expand them in the future.

Until then, IBM computers had been incompatible with one another. For businesses — the primary buyers of computers at the time — this meant having to buy a completely new machine if their data processing needs or business use cases changed. 

One couldn’t simply change out parts (like keyboards), connect to any printer, or use the same software or operating system across different computer models. Installing a more powerful processor meant extensive reprogramming.

The shift to the modular structure embodied by System/360 was largely driven by one IBM engineer, Bob Overton Evans. He persuaded the company’s chairman, Thomas Watson Jr., to stop building incompatible machines and instead develop a range of modular computers that would feature common building blocks.

Modularization has since transformed both hardware and software. Adenekan Dedeke, a technology and information systems professor at Northeastern University, encapsulates this impact in what he calls Evans’ Law of Modularity: “The inflexibilities, incompatibilities, and rigidities of complex and/or monolithically structured technologies could be simplified by the modularization of the technology structures (and processes).”

The impact of Evans’ advocacy is most obvious in computer hardware today. Even in closed systems like Apple’s Mac products, a user can connect external hard drives, keyboards, monitors, and cameras, as well as link to other Apple devices.

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But modularization has also spurred a revolution in software.

How Salesforce Kickstarted the Modularization of Software 

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In February 2000, at a Siebel Systems conference in San Francisco, 25 (hired) protesters in red T-shirts called for the end of software and gave out invitations to Salesforce’s launch party later that day. To enter the party, one had to bring a piece of old software to toss into a trash bin.

Customer relationship management (CRM) platform Salesforce’s beef with existing software was that it was bound on-premises, within devices. And once you installed it, you were generally stuck with whatever features it came with. Salesforce founder Marc Benioff believed software should be made available 24/7 via the cloud.

Salesforce - Law of Modularity
Salesforce

Salesforce went on to become one of the first-ever completely cloud-based products, forcing competing CRM giants to follow suit. Today, it is used by more than 150,000 businesses. The company reported a revenue of $26.5B in fiscal year 2022.

One reason Salesforce is so popular across many industries is that you can customize the system to suit different use cases. The Salesforce Customer 360 platform has cloud modules for sales, marketing, community, service, commerce, and analytics. On top of that, hundreds of apps can be connected to the platform through APIs. Third-party developers can build custom apps and extensions on top of the platform, too.

How APIs Enable Modularity and Generate Massive Value 

In the early 2000s, three companies — Salesforce, eBay, and Amazon — demonstrated how making tech more compatible can boost operational efficiency, increase user adoption, open up access to more products and services, and improve commercial performance. They did this through the use of application programming interfaces (APIs) — code that lets 2 different systems work with each other.

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APIs were a part of Salesforce’s business model from the beginning. Two weeks before its notorious protest, the company launched its web API, which let customers share data across different web applications. Many consider this to have been the first modern API.

In the same year, eBay launched an API for developers to create systems that helped sellers manage their growing businesses. And in 2002, Amazon launched an API that enabled third-party sites to display and search products from the e-commerce website.

APIs were a convenient way for companies with a lot of resources to share those resources with developers and expand their footprint, spark new ideas and accelerate development.” — Matt Hawkins, Co-Founder & CEO of Hoss

Modularity through APIs unlocks new use cases for both tech and traditional companies. E-commerce sites show you what products are available thanks to APIs connecting the site to inventory software. In countries with open banking APIs, third-party apps can access financial information — like bookkeeping software that reflects a company’s bank account balance — in real time.

Today, modularity isn’t just an attribute of tech products — it’s a product in itself. One of the earliest examples is the phone-calling API that Twilio started selling in 2008, which enabled apps to make cloud-hosted phone calls.

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Many tech products today rely on communication APIs to improve usability and customer service, from ride-hailing apps that let drivers and passengers call each other to banks that use SMS and video for identity verification.

The Internet of Things: A New Frontier for Fragmentation 

Modularity could pave the way for the future of the smart home.

Until now, internet of things (IoT) architectures have tended to support a specific use case (for example, a smart home component or a device for health monitoring), but this can make it difficult to efficiently stitch together different IoT devices and systems into a network.

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For example, a homeowner shouldn’t have to buy all of their appliances and electronics from a single vendor to have a smart home. Instead, one could put together a Nest thermostat, a Philips lamp, an Amazon Echo speaker, and a Xiaomi robot vacuum, and then manage them all through a single interface, storing data from these devices in the same location in the cloud.

In the same spirit as its 2002 API launch, Amazon has been an early mover here, seeking to build interoperability among intelligent voice assistants (IVAs). If it succeeds, its own IVA, Alexa, would work with any smart device. Google and Apple have largely resisted the initiative. However, the two have teamed up with Amazon and the Connectivity Standards Alliance on Matter, a connectivity standard that promotes interoperability among smart home devices and IoT platforms.

Businesses have more complex IoT use cases, and that amplifies the need for modularity. Consider factories that require a single analytics platform for all of their smart sensors and machines, manufacturers that must put together an automated assembly line using varying robotics and smart technologies, and fleets of autonomous trucks that need to maintain connectivity when they enter another country with different network service providers.

Takeaway

Across both hardware and software, modular design can drive a step-change in the value of tech products and services — both for the end-user, and for the business itself.

Flexible, customizable, and interoperable systems can also invite outside engagement, whether by creating space for third-party developers to build on top of a platform or through APIs that create new value via interconnected services.

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To be continued…

​Joan Aimuengheuwa is a content writer who takes keen interest in the scopes of innovation among African startups. She thrives at meeting targets and expectations. Contact: [email protected]

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