Software industry

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The software industry includes businesses for

software services, such as training, documentation, consulting and data recovery. The software and computer services industry spends more than 11% of its net sales for Research & Development which is in comparison with other industries the second highest share after pharmaceuticals & biotechnology.[1]

History

The first company founded to provide software products and services was

.

The

systems software
and programming environments with their machines.

When Digital Equipment Corporation (DEC) brought a relatively low-priced microcomputer to market, it brought computing within the 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 microcomputers, so other manufacturers including IBM, followed DEC's example quickly, resulting in the IBM AS/400 amongst others.

The industry expanded greatly with the rise of the personal computer ("PC") in the mid-1970s, which brought desktop computing to the office worker for the first time. In the following 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

client software
is loaded onto the end user's PC.

Size of the industry

The global software products market amounts to US$968.25 billion in 2021 and had a compound annual growth rate (CAGR) of 4%. Major companies include Microsoft, HP, Oracle, Dell and IBM.[5]

Mergers and acquisitions

The software industry has been subject to a high degree of consolidation over the past couple of decades. Between 1995 and 2018 around 37,039 mergers and acquisitions have been announced with a total known value of US$1,166 billion.[6] The highest number and value of deals was set in 2000 during the high times of the dot-com bubble with 2,674 transactions valued at US$105 billion. In 2017, 2,547 deals were announced valued at US$111 billion. Approaches to successfully acquire and integrate software companies are available.[7]

Business models within the software industry

Business models of software companies have been widely discussed.[8][9] Network effects in software ecosystems, networks of companies, and their customers are an important element in the strategy of software companies.[10]

See also

References

  1. ^ "The Pharmaceutical Industry in Figures Key Data 2021" (PDF). European Federation of Pharmaceutical Industries and Associations. Retrieved 28 June 2022.
  2. S2CID 5733812
    .
  3. ^ Campbell-Kelly, Martin (2003). From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry. Cambridge, Massachusetts: MIT Press. p. 57.
  4. ^ Fishman, Katharine Davis (1981). The Computer Establishment (paperback 1982). New York: McGraw-Hill Book Company. p. 268.
  5. ^ "Software Products Global Market Report 2021: COVID-19 Impact and Recovery to 2030". ResearchAndMarkets.com. September 9, 2021. Retrieved June 28, 2022.
  6. ^ "M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)". Institute for Mergers, Acquisitions and Alliances (IMAA). Retrieved 2018-02-28.
  7. .
  8. .
  9. ^ Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. Vol. 46:3
  10. .

External links