Evolution in nature produces specializations in a species to better adapt them to survive in their environment. Charles Darwin pioneered the work in this area in the 1800’s and – while he didn’t actually apply his theories to electronic design – if he had been alive today he might well have.

A look back over the past 40 years has shown us a truly amazing series of transformations with regard to the way in which electronics companies do business and create a product. Just as with species in the wild, some have adapted and survived, while others have clung stubbornly to the past and have faded into the mists of history – leaving only fossilized bones as a reminder that they were ever here at all.

There was a time way back in ancient history – say, the 1970’s – when companies believed that they had to control every aspect of their product in order to be in charge of their own destiny. Early computer companies of the day like Digital Equipment Corporation and Data General performed a wide array of activities in-house that today seem strange. They made their own peripherals, built their own fabs, bent their own sheet metal, printed their own manuals… I suspect they may even have cut down trees and pulped their own paper, but some of the details are lost in the mists of time.

These companies not only did it all themselves when producing their products, but they believed that they could satisfy all of their customers' needs by themselves. Dedicated systems running proprietary software or performing single proprietary functions were the norm, and they expected to “own” their customers environments. DEC and DG were slowly eaten up by faster, more adaptable species like Unix and Windows workstations and PCs. Wang went out of existence so fast it seemed like they had been truly struck by a meteor and killed instantly.

The first great lesson from evolution was the awareness that a single company doesn’t have to do it all by themselves. If you are a computer company, build computers. Don’t be a printer, or a sheet metal fabricator, unless that s really what you want to be. Focus on the product that you are actually building and the techniques that you need to build it.

This gave us outsourcing, Just In Time (JIT), and other manufacturing practices that turned production into a lean and swift practice that could outrun predatory competitors and turn on a dime. The next step in evolution was to turn this practice on the design process, and this gave rise to the IP industry. Once again, it’s all about having a focus on what your core competitive advantage is and devoting your energy to that.

If you are developing a new video system that is to employ a USB interface, for example, why would you want to design your own USB interface? That part of the system is a standard, everyone has one, yours is no different than anyone else’s… so why would you want to design that block yourself? Not only is this a waste of your time, but you are probably not as much of a USB expert as others anyway.

The answer? Buy a USB block from someone who specializes in USB blocks. Focus your energy designing new and differentiated content. So the industry that had already evolved away from manufacturing everything then evolved further and then realized that they didn’t need to design everything themselves.

The third stage of evolution that we are just beginning to see is driven by the realization that we don’t even need to own our own business environment. Just as physical buildings are starting to give way to networks of home-offices, so too are dedicated tools and even infrastructure giving way to virtual environments where we access what we need when we need it without worrying about purchasing and maintaining resources when we don’t need them.

Technologies like virtualization and clouds have enabled the use of computing resources, applications, and even complete virtualized machines and operating systems that are not owned in any one physical location, but instead accessed remotely when, and only when, they are needed. Efficiencies in operations have driven costs down and allowed even more focus on core business differentiation and value-add.

A host of extra benefits have come along with this move, including reduced power consumption because of more efficient utilization of existing shared resources. Yes, evolution is green!

With the virtualization of computing resources comes the virtualization of tools. Instead of owning and maintaining the software that runs on a dedicated server, businesses are increasingly turning towards tools provided through a Software As A Service (SaaS) model. The software is “rented” from a provider who may, in turn also be “renting” the computing platform that it is running on.

Some areas of business have been quicker to adopt SaaS than others, and the fear of control over proprietary design data has been part of the problem. Companies have been reluctant to let their core IP to get outside of their firewalls, fearing the loss of their core advantage. Higher levels of security, better encryption, and the growing comfort with the use of techniques such as Virtual Private Networks (VPN) are gradually changing opinions about the safety of data traveling outside of a proprietary network.

Instead of owning millions of dollars of design tools, or even renting licenses for tools that are installed locally, companies are starting to turn to tools that can be accessed over the network on a pay-per-use basis. Data is securely uploaded to a server, the design functions performed, and the results downloaded. An engineer in a company today can access millions of dollars of sophisticated tools with nothing more than a laptop in their living room.

This final stage of evolution is driving quantum levels of efficiency. Manufacturing is now being done by people who specialize in manufacturing. IP is developed by people who specialize in that IP. Leading edge companies now are using tools that are owned and maintained by people who specialize in owning and maintain tools.

More so than ever, we are free to focus on our core business and our differentiated value. Instead of lumbering dinosaurs we have turned into swift jaguars, and the move to relying on SaaS solutions to provide business tools is driving the next level of evolution. Companies that embrace the change will survive and thrive; those that don’t will add to the pile of bones from our extinct ancestors.