While there’s no denying that the world has gone mad for software, there seems to be a renewed interest in hardware investment.

At a time when the world seems to have gone gaga for all things software, why pump millions into hardware development? Because without hardware, software wouldn’t hold any value.

This was why the Small Enterprise Development Agency (SEDA), an agency of the South African government, recently partnered with Savant, a hardware-focused technology incubator, to pack hardware development in the country.

“We live in a physical world,” notes Savant’s CEO Nick Allen. He’s not denying the importance of digital, but stresses that software is only a relatively small component of reality. “Everything else is physical, and, therefore, hardware-related.”

Robyn Farah, a self-confessed technophile and the founder of KATO Technology, agrees. If you’ve ever heard the famous phrase, ‘Anything you have to do more than once should be automated’, you’ll understand why software is the industry’s darling. That said, she says that without hardware, we couldn’t really do much. Consider things like life-support machines, your mobile device or even something as trivial as your electric toothbrush, Farah adds. While the current obsession with software may lead some to believe it to be more significant than hardware, Farah stresses that a lot of software simply cannot run until the hardware is advanced/powerful enough to process it. This is where the need for greater investment comes in.

Upping investment

During the course of his career, Allen has worked with several early stage technology projects, offering them the support and helping them secure the finance they need to evolve into commercially viable businesses.

With this experience, he has witnessed the benefits of hardware innovation firsthand. We’ve seen many countries that were once commercially strong from a manufacturing perspective give up manufacturing in the face of greater competition of large countries that can do things so much cheaper. Not only does this mean job losses, but it also hampers innovation. “When we lose manufacturing capacity, we lose the opportunity to dictate terms on new innovation, and find ourselves always playing catch-up.”

On an international scale, Allen has noticed more and more global investors realising that the software environment is getting a little crowded and oversold. “Investors are slowly coming to the realisation that there are tangible opportunities in hardware – they have always been there, but are just starting to get more attention.”

Also, hardware development creates jobs across the board – from unskilled or lowskilled labour to engineers and scientists of every type. From his experience, scientists and engineers may have creative ideas and innovative problem-solving skills, but they generally lack the ability and acumen to run a business. This is where it becomes important for them to seek a helping hand. “Incubators play an increasingly critical role globally in bringing the commercial support these companies need to the table,” Allen notes, stressing that in order for them to do so successfully, they need to be properly funded and have the right skillsets on board to assist these hardware innovators.

According to Mervin Miemoukanda, a senior research analyst for software and market intelligence in Africa at the International Data Corporation (IDC), incubators have a significant impact on the development of the hardware space in South Africa. He believes that the increased growth of, and support for, hardware incubators will boost the uptake of ICT products and services in SA, drive the development of the local ICT industry and ensure that hardware products are readily available to the public at reasonable prices.

Local is lekker

For Farah, the benefits of South African businesses developing hardware to meet local needs are huge. Who is better positioned to develop hardware to solve local problems that South Africans themselves, she asks. And one of the greatest benefits, she adds, is the fact that we aren’t simply outsourcing ideas and jobs to people overseas, making us a more creative and capable nation.

“There is no denying that software is a fantastic enabler, but hardware is still critical to the world we live in – we live in a software defined world only so far as your viewpoint allows it,” says Allen. “Try to get home only using software, or undertake pretty much anything using only software – and you’ll see it isn’t possible. Hardware might not be sexy, but it remains a critical component of our lives.”

The tortoise and the hare

Speaking at the launch event for the SEDA/Savant partnership, various hardware-focused small business owners commented on the fact that the challenge with hardware development is that it doesn’t happen overnight. Consider that we live in an always-on, instant gratification society and it is easier to understand why hardware initiatives commonly lose investor interest. With software development proving less costly and time-consuming than hardware development, throwing money at the creation of prototypes and trials that take years to develop offer a slow return on investment and may never make their way into the mass market isn’t that appealing.

KATO’s Robyn Farah has regularly witnessed these unrealistic expectations. “People want a solution in the form of a product in one month and want it to cost around R5 000. This is totally unrealistic.” According to Farah, many of the projects KATO has been a part of haven’t moved beyond the third prototype phase because companies/individuals lack the time and money to go further. However, she remains positive about the potential of these new ideas. “One day we shall see a finished product being used.”

This is an adaptation from an article entitled, “The role of hardware in a software-defined world” on the brainstorm website.