There're similarities, but also quite a few differences as well. Airlines are a commodity business: the service Southwest sells is essentially the service United sells. Tech at the micro scale is very much differentiated: the service DropBox sells is very different from the service that AirBnB sells, which is very different from the service Google sells.
Tech is also weird in that software development has significant diseconomies of scale, while software operations has significant economies of scale. Small teams can develop a product faster, but once the product exists and has been proven in the marketplace, it's cheaper to scale from 100 servers to 100,000 servers than it was to go from 1 server to 100 servers. This has historically fueled the cycle of small tech startups being founded, gaining traction, getting bought, and then the founders quitting to found other small startups. It's economically rational for them to do so, because they can develop a product faster with a small team than inside a big organization.
I'm curious how the existence of cloud-hosting like Amazon EC2 will change this market. That's had the effect of splitting software development and software operations into separate markets: before, it used to be cheaper to integrate them into one firm, but now a commodity product exists that makes it feasible for the development firm to remain independent and simply pay a fee for all the operations support.
I suspect it's actually bad for startups in the long run, much like the power loom was bad for textile manufacturers. Since there're economies of scale to operations, that side of the market will tend to a few big players (right now Amazon has a virtually monopoly, and only a couple others even have the capability to offer something like that), while the startup side will tend towards many small firms. In a situation like that, the big firms have all the bargaining power, and so most of the profits will accrue to them.
Tech is also weird in that software development has significant diseconomies of scale, while software operations has significant economies of scale. Small teams can develop a product faster, but once the product exists and has been proven in the marketplace, it's cheaper to scale from 100 servers to 100,000 servers than it was to go from 1 server to 100 servers. This has historically fueled the cycle of small tech startups being founded, gaining traction, getting bought, and then the founders quitting to found other small startups. It's economically rational for them to do so, because they can develop a product faster with a small team than inside a big organization.
I'm curious how the existence of cloud-hosting like Amazon EC2 will change this market. That's had the effect of splitting software development and software operations into separate markets: before, it used to be cheaper to integrate them into one firm, but now a commodity product exists that makes it feasible for the development firm to remain independent and simply pay a fee for all the operations support.
I suspect it's actually bad for startups in the long run, much like the power loom was bad for textile manufacturers. Since there're economies of scale to operations, that side of the market will tend to a few big players (right now Amazon has a virtually monopoly, and only a couple others even have the capability to offer something like that), while the startup side will tend towards many small firms. In a situation like that, the big firms have all the bargaining power, and so most of the profits will accrue to them.