Computer Software Industry Overview

Excerpt from Computer Software Report

The US computer software industry involves about 60,000 companies with combined annual revenue of about $250 billion. About 60 percent of industry revenue comes from software publishing; custom programming accounts for the remainder. Large companies include Microsoft, Oracle, IBM Software, Symantec, and Cognizant Technology Solutions. The US packaged software segment is concentrated: the 50 largest companies generate about 70 percent of revenue. The US custom programming segment is highly fragmented.

Competitive Landscape

The US economy heavily influences business spending for software products. The success of programming companies depends heavily on strong technical expertise. The success of packaged-software companies depends on technical expertise and good marketing. Small software companies compete mainly by developing packaged products in small niches or producing custom products for individuals. Many small companies form alliances with larger ones to market their products.

Products, Operations & Technology

Packaged software products are generally programs that can be installed and operated by the customer with little or no assistance, such as an operating system. Custom programming either creates a new software product from scratch, or, more typically, customizes an existing software product for customer use. Custom program products can be very large, and may require special training and technical support.