Software industry

The software industry or software industry is the entirety of all companies that create and sell software . In a broader sense, companies that offer services in later software life cycles (e.g. software installation and configuration, user training) can also be assigned to the software industry. The software industry is characterized by high growth and is therefore gaining importance for the economy as a whole, not only in Germany. The Rhein-Main-Neckar IT cluster is one of the world's largest IT and software clusters, and the software industry in Germany is the subject of several broad research studies.

history

Before the 1960s, computers were either programmed by customers themselves or by the few free-trade computer vendors of the time such as UNIVAC or IBM . The first company founded to produce software products and services was the Computer Usage Company in 1955 . The software industry expanded in the early 1960s, almost exactly after computers first hit the mass market. Universities, government, and corporate customers created widespread demand for software. At that time, many of the programs were written in-house by full-time programming teams. Some were given in solidarity for free between the users of a particular machine. Others were made on a commercial basis, and companies in that line of business such as Computer Sciences Corporation , founded in 1959, began to grow. At this point in time, computer manufacturers also began to combine their operating system software and programming environments with their machines, so that software and hardware became one unit. In 1969, under the pressure of ongoing antitrust proceedings, IBM decided to decouple software and related services from hardware leasing contracts ("unbundling") and to provide software copyright protection in conjunction with license agreements ( end-user license agreement ).

When the Digital Equipment Corporation introduced a relatively inexpensive microcomputer , the use of computers was made possible by many more companies and universities worldwide; This development ensured the emergence of a great wave of innovation, which was expressed in the invention and development of new, highly developed programming languages and methodologies. New software was developed for the microcomputers, and others, including IBM, were quick to follow DEC's example. a. resulted in the manufacture of the IBM AS400.

The industry grew very rapidly in the mid-1970s with the advent of the personal computer , which brought the computing power of computers to the office worker's desk. In the years that followed, there was also a growing market for computer games , software applications, and utilities . DOS, Microsoft's first operating system product, was the dominant operating system of its time.

In the early years of the 21st century, Software as a Service (SaaS) was a successful new business model for hosting software ; However, similar business models have existed before. For the provider company, SaaS reduces worries about software piracy, as the only access is via the web and by definition no customer software is downloaded onto the end user's PC.

Market overview

The software industry is a young branch and has a high proportion of young companies. While the market barriers are low and encourage the entry of new firms, a strong consolidation takes place. The software industry is characterized by one of the highest volumes of corporate takeovers .

According to research firm International Data Corporation , the worldwide software industry had a turnover of 230 billion US dollars in 2008. Some of the world's largest companies are directly (e.g. Microsoft ) or indirectly (e.g. Apple ) in the software industry.

properties

The software industry has characteristics that distinguish it from other industries:

Software is a digital good that can be reproduced at low cost. This also means that copyrights are difficult to enforce ( software piracy ).
The software industry is highly internationalized due to the ease with which software can be distributed and characterized by global competition. There is little home advantage in national markets; For example, SAP and Software AG generate around 85% of their sales in exports.
“Winner-takes-it-all” markets with a large number of company takeovers through network effects .

Observance of these special properties forms the basic elements of the strategies of software providers, software ecosystems and networks of companies .

Classification

The software providers can be classified according to various criteria:

Software provider in the narrower sense - development of software. Divisible according to the type of software with regard to:
- Proximity to hardware:
  - System software: including operating systems
  - System-related software: such as middleware and database systems
  - Application software : for example word processing or software for accounting
- User type:
  - commercial (" enterprise software ")
  - Private
- Degree of standardization:
  - Individual software: customized software for a specific customer company. That branch is growing particularly fast in the Indian software industry .
  - (smooth transition through customizing the standard software)
  - Standard software : Development takes place for the standardized needs of potential users. A survey of 489 German CIOs in 2010 showed that the proportion of companies that mainly use standard software (62.9% of those surveyed) will tend to increase.
Software provider in the broader sense - offering services in the later life cycle: For example, configuration and adaptation of standard software from large software vendors such as SAP or Oracle to the individual needs of their customers. For standard software manufacturers, this service business usually makes up a clear majority of sales.

Individual evidence

↑ ^a ^b ^c ^d ^e ^f ^g Peter Buxmann, Heiner Diefenbach , Thomas Hess: The software industry: Economic principles, strategies, perspectives . 2nd Edition. Springer, Heidelberg 2011, ISBN 978-3-642-13360-2 ( preview in Google book search).

↑ Timo Leimbach, Sven Wydra: Software Atlas Germany 2012. Karlsruhe 2012. ( PDF file; 969 kB ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. )@1@ 2

↑ German Software Champions ( Memento of the original from September 22, 2017 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.

^ Software Atlas Germany

↑ Software Industry Survey Germany ( Memento of the original from October 30, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.

^ L. Johnson: A view from the 1960s: How the software industry began . In: IEEE Annals of the History of Computing . tape 20 , 1, January – March, 1998, pp. 36-42 , doi : 10.1109 / 85.646207 .

↑ M. Friedewald, HD Rombach, P. Stahl, M. Broy, S. Hartkopf, S. Kimpeler, K. Kohler, R. Wucher, P. Zoche: Softwareentwicklung in Deutschland. In: Computer Science Spectrum. April 2001, pp. 81-90.

^ Karl M. Popp, Ralf Meyer: Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry . BOD, Norderstedt, Germany 2010, ISBN 3-8391-6983-6 .

^ Michael A. Cusumano: The Business of Software: What every Manager, Programmer and Entrepreneur Must Know to Succeed in Good Times and Bad . Simon & Schuster, New York, NY 2004, pp. 37 .

[BDH2-1] ↑ ^a ^b ^c ^d ^e ^f ^g Peter Buxmann, Heiner Diefenbach , Thomas Hess: The software industry: Economic principles, strategies, perspectives . 2nd Edition. Springer, Heidelberg 2011, ISBN 978-3-642-13360-2 ( preview in Google book search).