Software industry
Encyclopedia
The software industry includes businesses involved in the development
, maintenance
and publication
of computer software
using any business model. The industry also includes software services, such as training
, documentation
, and consulting.
Before this time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as UNIVAC
and IBM
.
The first company founded to provide software products and services was Computer Usage Company
in 1955.
The software industry expanded in the early 1960s, almost immediately after computers were first sold in mass-produced quantities. Universities, government, and business customers created a demand for software. Many of these programs were written in-house by full-time staff programmers. Some were distributed freely between users of a particular machine for no charge. Others were done on a commercial basis, and other firms such as Computer Sciences Corporation
(founded in 1959) started to grow. The computer-makers started bundling operating systems software and programming environments with their machines.
When Digital Equipment Corporation
brought a relatively low-priced micro-computer to market, it brought computing within reach of many more companies and universities worldwide, and it spawned great innovation in terms of new, powerful programming languages and methodologies. New software was built for micro-computers, and others, including IBM, followed DECs example quickly, resulting in the IBM AS400 amongst others.
The industry expanded greatly with the rise of the personal computer in the mid-1970s, which brought computing to the desktop of the office worker. In subsequent years, it also created a growing market for games, applications, and utilities. DOS, Microsoft
's first operating system product, was the dominant operating system at the time.
In the early years of the 21st century, another successful business model has arisen for hosted software, called software as a service, or SaaS
; this was at least the third time this model had been attempted. SaaS reduces the concerns about software piracy, since it can only be accessed through the Web, and by definition no client software is loaded onto the end user's PC.
, Google
, Microsoft
, IBM
, Sybase
, EMC
, Oracle
and VMWare
. Enterprise software, the software that automates business processes in finance, production, logistics, sales and marketing, is made by Oracle
, SAP AG
, Sage
and Infor. Security software is made by the likes of Symantec
, Trend Micro
and Kaspersky. Several industry-specific software makers are also among the largest software companies in the world: SunGard
, making software for banks, BlackBoard
making software for schools, and companies like Qualcomm
or CyberVision making software for telecom companies.
Other companies do contract programming to develop unique software for one particular client company, or focus on configuring and customizing suites from large vendors such as SAP or Oracle.
have been announced with a total known value of 1'451 bil. USD. The highest number and value of deals was set in 2000 during the high times of the internet bubble with 6'757 transactions valued at 447 bil. USD. In 2010, 1'628 deals were announced valued at 49 bil. USD.
Software development
Software development is the development of a software product...
, maintenance
Software maintenance
Software Maintenance in software engineering is the modification of a software product after delivery to correct faults, to improve performance or other attributes....
and publication
Software publisher
A software publisher is a publishing company in the software industry between the developer and the distributor. In some companies, two or all three of these roles may be combined ....
of computer software
Computer software
Computer software, or just software, is a collection of computer programs and related data that provide the instructions for telling a computer what to do and how to do it....
using any business model. The industry also includes software services, such as training
Training
The term training refers to the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies. It forms the core of apprenticeships and provides the backbone of content at institutes of...
, documentation
Software documentation
Software documentation or source code documentation is written text that accompanies computer software. It either explains how it operates or how to use it, and may mean different things to people in different roles....
, and consulting.
History
The word "software" had been coined as a prank by at least 1953, but did not appear in print until the 1960s.Before this time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as UNIVAC
UNIVAC
UNIVAC is the name of a business unit and division of the Remington Rand company formed by the 1950 purchase of the Eckert-Mauchly Computer Corporation, founded four years earlier by ENIAC inventors J. Presper Eckert and John Mauchly, and the associated line of computers which continues to this day...
and IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
.
The first company founded to provide software products and services was Computer Usage Company
Computer Usage Company
Computer Usage Company , sometimes called Computer Usage Corporation, was the first independent company to market computer software.-History:...
in 1955.
The software industry expanded in the early 1960s, almost immediately after computers were first sold in mass-produced quantities. Universities, government, and business customers created a demand for software. Many of these programs were written in-house by full-time staff programmers. Some were distributed freely between users of a particular machine for no charge. Others were done on a commercial basis, and other firms such as Computer Sciences Corporation
Computer Sciences Corporation
Computer Sciences Corporation is an American information technology and business services company headquartered in Falls Church, Virginia, USA...
(founded in 1959) started to grow. The computer-makers started bundling operating systems software and programming environments with their machines.
When Digital Equipment Corporation
Digital Equipment Corporation
Digital Equipment Corporation was a major American company in the computer industry and a leading vendor of computer systems, software and peripherals from the 1960s to the 1990s...
brought a relatively low-priced micro-computer to market, it brought computing within reach of many more companies and universities worldwide, and it spawned great innovation in terms of new, powerful programming languages and methodologies. New software was built for micro-computers, and others, including IBM, followed DECs example quickly, resulting in the IBM AS400 amongst others.
The industry expanded greatly with the rise of the personal computer in the mid-1970s, which brought computing to the desktop of the office worker. In subsequent years, it also created a growing market for games, applications, and utilities. DOS, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
's first operating system product, was the dominant operating system at the time.
In the early years of the 21st century, another successful business model has arisen for hosted software, called software as a service, or SaaS
Saas
SAAS is an abbreviation for* Social Accountability Accreditation Services* Software as a service * Student Awards Agency for Scotland* Seattle Academy of Arts and Sciences* South Australian Ambulance Service...
; this was at least the third time this model had been attempted. SaaS reduces the concerns about software piracy, since it can only be accessed through the Web, and by definition no client software is loaded onto the end user's PC.
Software sectors
There are several types of businesses in the software industry. Infrastructure software, including operating systems, middleware and databases, is made by companies and organisations such as LinuxLinux
Linux is a Unix-like computer operating system assembled under the model of free and open source software development and distribution. The defining component of any Linux system is the Linux kernel, an operating system kernel first released October 5, 1991 by Linus Torvalds...
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, Sybase
Sybase
Sybase, an SAP company, is an enterprise software and services company offering software to manage, analyze, and mobilize information, using relational databases, analytics and data warehousing solutions and mobile applications development platforms....
, EMC
EMC Corporation
EMC Corporation , a Financial Times Global 500, Fortune 500 and S&P 500 company, develops, delivers and supports information infrastructure and virtual infrastructure hardware, software, and services. EMC is headquartered in Hopkinton, Massachusetts, USA.Former Intel executive Richard Egan and his...
, Oracle
Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems...
and VMWare
VMware
VMware, Inc. is a company providing virtualization software founded in 1998 and based in Palo Alto, California, USA. The company was acquired by EMC Corporation in 2004, and operates as a separate software subsidiary ....
. Enterprise software, the software that automates business processes in finance, production, logistics, sales and marketing, is made by Oracle
Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation that specializes in developing and marketing hardware systems and enterprise software products – particularly database management systems...
, SAP AG
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...
, Sage
Sage SA
SAGE SA is a privately held software publisher with customers in the banking and finance industries. SAGE has its headquarters in Switzerland, and branches in Dubai and Singapore.-History:...
and Infor. Security software is made by the likes of Symantec
Symantec
Symantec Corporation is the largest maker of security software for computers. The company is headquartered in Mountain View, California, and is a Fortune 500 company and a member of the S&P 500 stock market index.-History:...
, Trend Micro
Trend Micro
Trend Micro Inc. is a computer security company. It is headquartered in Tokyo, Japan and markets Trend Micro Internet Security, Trend Micro Worry-Free Business Security, OfficeScan, and other related security products and services...
and Kaspersky. Several industry-specific software makers are also among the largest software companies in the world: SunGard
SunGard
SunGard is a multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. It was formed in 1983, as a spin-off of the computer services division of Sun Oil Company, during a period of low crude oil...
, making software for banks, BlackBoard
Blackboard
A chalkboard is a reusable writing surface.Blackboard may also refer to:* Blackboards are synonymous with "boards of infamy", an element of agitation-propaganda in the Soviet Union in 1930s, coincidental with Holodomor...
making software for schools, and companies like Qualcomm
Qualcomm
Qualcomm is an American global telecommunication corporation that designs, manufactures and markets digital wireless telecommunications products and services based on its code division multiple access technology and other technologies. Headquartered in San Diego, CA, USA...
or CyberVision making software for telecom companies.
Other companies do contract programming to develop unique software for one particular client company, or focus on configuring and customizing suites from large vendors such as SAP or Oracle.
Leading companies: mindshare and marketshare
In terms of technology leadership, the software industry has long been led by IBM. However, Microsoft became the dominant PC operating system supplier. Other companies that have substantial mindshare (not: marketshare) in the software industry are SUN Microsystems, the developer of the Java platform (purchased by Oracle in 2009). However in terms of revenues coming from software sales, the software industry is clearly dominated by Microsoft, since inception. Microsoft products are still sold in largest number across the globe.Size of the industry
According to market researcher DataMonitor, the size of the worldwide software industry in 2008 was US$ 303.8 billion, an increase of 6.5% compared to 2007. Americas account for 42.6% of the global software market's value. DataMonitor forecasts that in 2013, the global software market will have a value of US$ 457 billion, an increase of 50.5% since 2008.Mergers & Acquisitions
The software industry has been subject to a high degree of consolidation over the past couple of decades. From 1988 to 2010, 41'136 mergers and acquisitionsMergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
have been announced with a total known value of 1'451 bil. USD. The highest number and value of deals was set in 2000 during the high times of the internet bubble with 6'757 transactions valued at 447 bil. USD. In 2010, 1'628 deals were announced valued at 49 bil. USD.
Business models the software industry
Business models of software companies have been widely discussed. Network effects in software ecosystems networks of companies and their customers are an important element in the strategy of software companies.See also
- Computer softwareComputer softwareComputer software, or just software, is a collection of computer programs and related data that provide the instructions for telling a computer what to do and how to do it....
- Software developmentSoftware developmentSoftware development is the development of a software product...
- Software publisherSoftware publisherA software publisher is a publishing company in the software industry between the developer and the distributor. In some companies, two or all three of these roles may be combined ....
- Software engineeringSoftware engineeringSoftware Engineering is the application of a systematic, disciplined, quantifiable approach to the development, operation, and maintenance of software, and the study of these approaches; that is, the application of engineering to software...
- World's largest software companiesWorld's largest software companiesSeveral lists exist that provide an overview of large software companies in the world. Three lists are available to the public. The lists differ by methodology of composition and consequently show substantial differences in both listed companies and ranking of those companies...
External links
- Software and Information Industry Association website
- SoftwareCEO the largest online community of software executives in the world
- Software Magazine website
- Software Industry Professionals website
- Software Association of Oregon website