software industry

The first company founded to provide software products and services was Computer Usage Company in 1955.{{cite journal |title= Recollections of the first software company |first= Elmer C. |last= Kubie |journal= Annals of the History of Computing |volume= 16 |issue= 2 |publisher= IEEE Computer Society |date= Summer 1994 |pages= 65–71 |doi= 10.1109/85.279238 |s2cid= 5733812 }} Before that time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as Sperry Rand and IBM.

The software industry expanded in the early 1960s, shortly after computers became widely available. Demand for software was created by universities, the government, and businesses. Many of these programs were developed by full-time staff programmers in-house. Some were distributed free of charge among users of a particular machine. Others were done on a commercial basis, and other firms such as Computer Sciences Corporation (founded in 1959) started to grow. Other influential or typical software companies begun in the early 1960s included Advanced Computer Techniques, Automatic Data Processing, Applied Data Research, and Informatics General.{{cite book | title=From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry | url=https://archive.org/details/fromairlinereser00mart_0 | url-access=registration | first=Martin | last=Campbell-Kelly | author-link=Martin Campbell-Kelly | publisher=MIT Press | location=Cambridge, Massachusetts | year=2003 | page=[https://archive.org/details/fromairlinereser00mart_0/page/57 57]| isbn=978-0-262-03303-9 }}{{cite book | title=The Computer Establishment | first=Katharine Davis | last=Fishman | publisher= McGraw-Hill Book Company | location=New York | year=1981 | type=paperback 1982 | page=268}} The computer/hardware makers started bundling operating systems, 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 business model has arisen for hosted software, called software-as-a-service, or SaaS; this was at least the third time{{Citation needed|date=July 2012}} this model had been attempted. From the point of view of producers of some proprietary software, SaaS reduces the concerns about unauthorized copying, since it can only be accessed through the Web, and by definition no client software is loaded onto the end user's PC.

Market research firm Gartner estimates the global market for IT spending in 2024 at $3.73 trillion. If telecoms services are included, this will rise to $5.26 trillion.{{Cite web |date=2024-07-16 |title=Gartner Forecasts Worldwide IT Spending to Grow 7.5% in 2024 |url=https://www.gartner.com/en/newsroom/press-releases/2024-07-16-gartner-forecasts-worldwide-it-spending-to-grow-7-point-5-percent-in-2024 |access-date=2024-12-14 |website=Gartner}} Major companies include Microsoft, HP, Oracle, Dell and IBM.{{cite news |date=September 9, 2021 |title=Software Products Global Market Report 2021: COVID-19 Impact and Recovery to 2030 |url=https://www.businesswire.com/news/home/20210909006012/en/Software-Products-Global-Market-Report-2021-COVID-19-Impact-and-Recovery-to-2030 |access-date=June 28, 2022 |website=ResearchAndMarkets.com}}

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.{{Cite news|url=https://imaa-institute.org/m-and-a-by-industries/|title=M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)|work=Institute for Mergers, Acquisitions and Alliances (IMAA)|access-date=2018-02-28|language=en-US}} 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.{{cite book |last=Popp |first=Karl Michael |title=Mergers and Acquisitions in the Software Industry - foundations of due diligence |year=2013 |publisher=Books on demand |location=Norderstedt |isbn=978-3-7322-4381-5 |url=http://mergerduediligence.com/ }}

Software industry business models include SaaS (subscription-based), PaaS (platform services), IaaS (infrastructure services), and freemium (free with premium features). Others are perpetual licenses (one-time fee), ad-supported (free with ads), open source (free with paid support), pay-per-use (usage-based), and consulting/customization services. Hybrid models combine multiple approaches.

Business models of software companies have been widely discussed.{{cite book

| title = Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry

| year = 2010

| publisher = BOD

| location = Norderstedt, Germany

| isbn = 978-3-8391-6983-4

| author = Karl M. Popp and Ralf Meyer}}Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. Vol. 46:3 Network effects in software ecosystems, networks of companies, and their customers are an important element in the strategy of software companies.{{cite book

| title = Software Ecosystem: Understanding an Indispensable Technology and Industry

| year = 2003

| publisher = MIT Press

| location = Cambridge, MA

| isbn = 0-262-13432-2

| author9 = David G. Messerschmitt and Clemens Szyperski}}

• Software engineering
• World's largest software companies
• Function point
• Software development effort estimation
• Comparison of development estimation software

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{{Wiktionary}}

• [https://sektor.ahmetcadirci.com Sektörler ve Endüstriler]

• {{cite web

|url = https://www.gnu.org/philosophy/words-to-avoid.en.html#SoftwareIndustry

|title = Software Industry

|work = Words to Avoid (or Use with Care) Because They Are Loaded or Confusing

|publisher = Free Software Foundation

|date = 2012-11-20

|access-date = 2013-01-31

}}

{{Industries}}

{{Authority control}}

Category:Industries (economics)

Category:Information economy