Must-know: An overview of the software industry
“Software” refers to computer program or data (bits and bytes stored), that can be stored electronically.
July 1 2014, Published 4:33 p.m. ET
What is a software?
The software industry has transformed the way organizations, businesses, and even people coordinate and work. Its impact on the global economy and across various industries can be gauged by the increase in innovations, technical progress, enhanced productivity, and the workforce. “Software” refers to computer program or data (bits and bytes stored), that can be stored electronically. It’s used by the computer processor to perform various tasks. Mobile software applications (or apps) work in the same manner as their computer software counterparts. Apps are designed for specific tasks like games, global positioning system (or GPS), and music.
Microsoft leads the software market
The previous chart shows the revenue contribution of different players in the software industry. According to Gartner, in 2013, worldwide software revenue stood at $407.3 billion, compared to $388.5 billion in 2012, registering a 4.8% increase. Microsoft (MSFT) continues to be the market leader in the segment and holds 16% market share, followed by Oracle (ORCL) and IBM (IBM) at 7.3% and 7.1%, respectively. SAP AG (SAP) and Symantec (SYMC) are among the top ten players in the industry.
Software is expected to be the fastest growing industry in the IT space
According to Forrester, in 2014 and as the economy improves, the software industry is expected to be the fastest growing industry with expected growth of 7.1%, followed by information technology (or IT) consulting and systems integration services at 6.6% in the IT space. IT consulting refers to the advisory services that help clients in assessing the benefits of different technologies. It helps formulate a suitable technology strategy to align it with clients’ business strategies.
System integration refers to the process of making diverse hardware and software components work together as a system. It’s a value addition process of linking different computing systems and software applications so that independent applications work as one. The majority of funds allocated for IT spending goes into software development, which clearly indicates its dominance. The emergence of cloud, mobile computing, and applications like business intelligence and analytics are making sure that this growth isn’t slowing down.
The software industry is involved in the development, marketing, and sales and is multifaceted. Its scope ranges from personal computer applications, operating systems, network management tools, enterprise software, software applications, operating systems, and customized software.