A Curious Look at What McKinsey Considers “Next-Generation Software Development”

  • Posted by: Recode

The recent Technology Trends Outlook 2023 report by McKinsey cites next-generation software development as one of the most prominent themes. Driven by new software tools that enable modern deployment pipelines and automated code generation, the trend is poised to completely transform how software is developed, tested, and maintained. But what does this mean for CTOs?

Read on as we deep dive into what next-generation software development entails and the skills and competencies required to master it. 

What Is Next-Generation Software Development?

The technology landscape is constantly evolving. New technologies like Generative AI (GenAI) and platforms like Large Language Model-based ChatGPT have taken the world by storm, helping businesses achieve the impossible. 

These next-gen technologies are transforming the skills and capabilities of software development teams, enabling even the nontechnical workforce to easily build and test modern applications. 

Next-generation software development entails the use of advanced and intelligent technologies to simplify processes at every stage of the software development lifecycle (SDLC). By leveraging emerging tools, platforms, and processes, organizations can simplify complicated development and testing tasks and build and deploy applications quickly.

What Is Driving the Growth of Next-Gen Software Development?

Several technologies are driving the growth of next-gen software development. The top trends include: 

1. GenAI-led Technology Innovations

Software development has always been a cumbersome and time-consuming task. Although advancements in AI helped streamline coding and testing processes, the emergence of GenAI and LLMs has completely changed the game. 

By allowing developers to complete tasks twice as fast, the GenAI technology is unleashing high levels of productivity. In fact, by expediting manual work, accelerating code development, and increasing developers’ ability to tackle new challenges, GenAI-led technology innovations are poised to enhance the overall developer experience. 


2. IaC

The popularity of Infrastructure as Code (IaC) also plays a big role in the surge of next-generation software development, with the IaC market expected to be worth $2.3 billion by 2027. 

By automating the management and provisioning of infrastructure resources, IaC allows teams to define and manage infrastructure using code. This approach paves the way for improved repeatability, consistency, version control, and easier collaboration – and is increasingly being used in modern DevOps and cloud computing environments.

3. Microservices

Microservices are revolutionizing the way software is developed. With the cloud microservices market expected to surpass the $6 billion mark by 2030, the technology is helping developers break complex applications down into smaller, independent services. 

With each service capable of developing, deploying, and scaling on its own, this new architectural style is making the traditional monolithic architecture obsolete and contributing greatly to the next-gen software development wave. 

4. Low and No-Code Platforms

The widespread adoption of low-code and no-code platforms is another factor driving the growth of next-generation software development. 

By providing an intuitive and graphical interface, drag-and-drop tools, and reusable components, these platforms allow developers to create applications with minimal coding — significantly reducing the time and effort spent in development. 

5. AI-Based Testing

The use of AI in the realm of software testing is yet another driver of next-gen software development, with the AI-enabled testing market expected to reach $1.63 billion by 2030. 

In essence, AI-based testing involves utilizing artificial intelligence techniques to enhance and automate various aspects of the testing process. It helps teams improve test coverage, efficiency, and accuracy. 

This approach aims to address some of the challenges associated with traditional testing methods across various aspects, including test script creation, data generation, anomaly detection, and more. 

What Skills Does It Take to Enable Next-Gen Software Development?

If you want to ride the next-generation software development wave, you must have a team with certain skills and capabilities. Let’s look at the top skills needed to enable next-gen software development: 

AI-Powered Application Development

As AI becomes the mainstay, having skills that enable AI-led automation is a great way to minimize human effort (and error) and speed up time-to-market. 

By integrating AI technologies into various stages of the software development lifecycle, you can leverage its capabilities to analyze data, make predictions, learn from patterns, and get necessary assistance across the development and testing stages.

Data Engineering

Regardless of which new technologies emerge, data will continue to serve as the backbone of next-gen software development. To keep up, you will need to invest in data and analytics skills to make sense of the growing volumes of structured and unstructured data. 

These skills will also help in crafting the right data inputs to feed into AI algorithms that streamline the different aspects of next-gen software development. 

Middleware-Led Integration

With today’s organizations using a sundry list of tools and applications in their day-to-day operations, enabling middleware-led integration can ensure enterprise digital applications are interconnected securely and seamlessly. 

The right set of integration services can help in rolling out incremental daily deployments as well as large system modernizations, ensuring business as usual.


As the world comes to terms with the metamorphosis caused by technologies like GenAI, now is the time to embark on the next-generation software development journey. Although this new trend demands the use of modern technologies, it also requires you to be aware of the many challenges. 

From customizing APIs to thwarting emerging security risks and bringing in developers to monitor and debug low-code applications to keeping track of uncoordinated changes and upgrades in code — exploiting the many opportunities while being cognizant of the many hurdles is key to setting a robust foundation for next-gen software development.

Author: Recode

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