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<h2 id="history">History</h2> <p>The first company founded to provide software products and services was <a href="/facts/Computer_Usage_Company/eQLHJJm8">Computer Usage Company</a> in 1955.<a class="footnote-ref" id="fnref:2" href="#fn:2"><sup>2</sup></a> Before that time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as <a href="/facts/Sperry_Rand/PkD6zESp">Sperry Rand</a> and <a href="/facts/IBM/QszA7nwd">IBM</a>. </p><p>The <a href="/facts/Software/RP79lVSW">software</a> 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 <a href="/facts/Computer_Sciences_Corporation/zAXnY5MN">Computer Sciences Corporation</a> (founded in 1959) started to grow. Other influential or typical software companies begun in the early 1960s included <a href="/facts/Advanced_Computer_Techniques/jw2K5Wzk">Advanced Computer Techniques</a>, <a href="/facts/Automatic_Data_Processing/3vNDFXE3">Automatic Data Processing</a>, <a href="/facts/Applied_Data_Research/qgq5HRDr">Applied Data Research</a>, and <a href="/facts/Informatics_General/UYhxU2MD">Informatics General</a>.<a class="footnote-ref" id="fnref:3" href="#fn:3"><sup>3</sup></a><a class="footnote-ref" id="fnref:4" href="#fn:4"><sup>4</sup></a> The computer/<a href="/facts/Computer_hardware/8jSjsCNv">hardware</a> makers started bundling <a href="/facts/Operating_systems/8XTuvMh2">operating systems</a>, <a href="/facts/Systems_software/0faaXG4d">systems software</a> and programming environments with their machines. </p><p>When <a href="/facts/Digital_Equipment_Corporation/ztxs6keA">Digital Equipment Corporation</a> (DEC) brought a relatively low-priced <a href="/facts/Microcomputer/ETW22UTv">microcomputer</a> 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 <a href="/facts/IBM_AS%2f400/BWYaNnqe">IBM AS/400</a> amongst others. </p><p>The industry expanded greatly with the rise of the <a href="/facts/Personal_computer/koaYfNce">personal computer</a> ("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. <a href="/facts/DOS/sWwDXNmX">DOS</a>, <a href="/facts/Microsoft/nGIDDXdx">Microsoft</a>'s first <a href="/facts/Operating_system/8XTuvMh2">operating system</a> product, was the dominant operating system at the time. </p><p>In the early years of the 21st century, another successful <a href="/facts/Business_model/TL9XXsQa">business model</a> has arisen for hosted software, called <a href="/facts/Software-as-a-service/LPyPQ5b7">software-as-a-service</a>, or SaaS; this was at least the third time this model had been attempted. From the point of view of producers of some <a href="/facts/Proprietary_software/9zcskxYL">proprietary software</a>, SaaS reduces the concerns about <a href="/facts/Software_copyright/NGaCd2oc">unauthorized copying</a>, since it can only be accessed through the Web, and by definition no <a href="/facts/Client_software/u0wlVsWI">client software</a> is loaded onto the end user's PC. </p> <h2 id="size-of-the-industry">Size of the industry</h2> <p>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.<a class="footnote-ref" id="fnref:5" href="#fn:5"><sup>5</sup></a> Major companies include Microsoft, <a href="/facts/HP_Inc./68EHIDIa">HP</a>, <a href="/facts/Oracle_Corporation/0z14FygH">Oracle</a>, <a href="/facts/Dell/wLlYNTMM">Dell</a> and IBM.<a class="footnote-ref" id="fnref:6" href="#fn:6"><sup>6</sup></a> </p> <h2 id="mergers-and-acquisitions">Mergers and acquisitions</h2> <p>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 <a href="/facts/Mergers_and_acquisitions/YfczSf3M">mergers and acquisitions</a> have been announced with a total known value of US$1,166 billion.<a class="footnote-ref" id="fnref:7" href="#fn:7"><sup>7</sup></a> The highest number and value of deals was set in 2000 during the high times of the <a href="/facts/Dot-com_bubble/dCFWQt0s">dot-com bubble</a> 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.<a class="footnote-ref" id="fnref:8" href="#fn:8"><sup>8</sup></a> </p> <h2 id="business-models-within-the-software-industry">Business models within the software industry</h2> <p>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. </p><p>Business models of software companies have been widely discussed.<a class="footnote-ref" id="fnref:9" href="#fn:9"><sup>9</sup></a><a class="footnote-ref" id="fnref:10" href="#fn:10"><sup>10</sup></a> <a href="/facts/Network_effect/IvxIDA2d">Network effects</a> in <a href="/facts/Software_ecosystem/mA9Fcymk">software ecosystems</a>, networks of companies, and their customers are an important element in the strategy of software companies.<a class="footnote-ref" id="fnref:11" href="#fn:11"><sup>11</sup></a> </p> <h2 id="see-also">See also</h2> <ul><li><a href="/facts/Software_engineering/KX6cE9kz">Software engineering</a></li> <li><a href="/facts/World%2527s_largest_software_companies/LWHrk0tt">World's largest software companies</a></li> <li><a href="/facts/Function_point/7E1RPg1n">Function point</a></li> <li><a href="/facts/Software_development_effort_estimation/Vho7MFY4">Software development effort estimation</a></li> <li><a href="/facts/Comparison_of_development_estimation_software/Vho7MFY4">Comparison of development estimation software</a></li></ul> <h2 id="external-links">External links</h2> Look up <i>software industry</i> in Wiktionary, the free dictionary. <ul><li><a href="https://sektor.ahmetcadirci.com">Sektörler ve Endüstriler</a></li></ul> <ul><li><a href="https://www.gnu.org/philosophy/words-to-avoid.en.html#SoftwareIndustry">"Software Industry"</a>. <i>Words to Avoid (or Use with Care) Because They Are Loaded or Confusing</i>. <a href="/facts/Free_Software_Foundation/k0sBmw7y">Free Software Foundation</a>. 2012-11-20. Retrieved 2013-01-31.</li></ul> <h2 id="references">References</h2> <ol> <li id="fn:1"><p>"The Pharmaceutical Industry in Figures Key Data 2021" (PDF). European Federation of Pharmaceutical Industries and Associations. Retrieved 28 June 2022. <a href="https://www.efpia.eu/media/602709/the-pharmaceutical-industry-in-figures-2021.pdf" target="_blank">https://www.efpia.eu/media/602709/the-pharmaceutical-industry-in-figures-2021.pdf</a> <a href="#fnref:1" class="footnote-back-ref">↩</a></p></li> <li id="fn:2"><p>Kubie, Elmer C. (Summer 1994). "Recollections of the first software company". Annals of the History of Computing. 16 (2). IEEE Computer Society: 65–71. doi:10.1109/85.279238. S2CID 5733812. <a href="/wiki/Annals_of_the_History_of_Computing" target="_blank">/wiki/Annals_of_the_History_of_Computing</a> <a href="#fnref:2" class="footnote-back-ref">↩</a></p></li> <li id="fn:3"><p>Campbell-Kelly, Martin (2003). From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry. Cambridge, Massachusetts: MIT Press. p. 57. ISBN 978-0-262-03303-9. <a href="978-0-262-03303-9" target="_blank">978-0-262-03303-9</a> <a href="#fnref:3" class="footnote-back-ref">↩</a></p></li> <li id="fn:4"><p>Fishman, Katharine Davis (1981). The Computer Establishment (paperback 1982). New York: McGraw-Hill Book Company. p. 268. <a href="#fnref:4" class="footnote-back-ref">↩</a></p></li> <li id="fn:5"><p>"Gartner Forecasts Worldwide IT Spending to Grow 7.5% in 2024". Gartner. 2024-07-16. Retrieved 2024-12-14. <a href="https://www.gartner.com/en/newsroom/press-releases/2024-07-16-gartner-forecasts-worldwide-it-spending-to-grow-7-point-5-percent-in-2024" target="_blank">https://www.gartner.com/en/newsroom/press-releases/2024-07-16-gartner-forecasts-worldwide-it-spending-to-grow-7-point-5-percent-in-2024</a> <a href="#fnref:5" class="footnote-back-ref">↩</a></p></li> <li id="fn:6"><p>"Software Products Global Market Report 2021: COVID-19 Impact and Recovery to 2030". ResearchAndMarkets.com. September 9, 2021. Retrieved June 28, 2022. <a href="https://www.businesswire.com/news/home/20210909006012/en/Software-Products-Global-Market-Report-2021-COVID-19-Impact-and-Recovery-to-2030" target="_blank">https://www.businesswire.com/news/home/20210909006012/en/Software-Products-Global-Market-Report-2021-COVID-19-Impact-and-Recovery-to-2030</a> <a href="#fnref:6" class="footnote-back-ref">↩</a></p></li> <li id="fn:7"><p>"M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)". Institute for Mergers, Acquisitions and Alliances (IMAA). Retrieved 2018-02-28. <a href="https://imaa-institute.org/m-and-a-by-industries/" target="_blank">https://imaa-institute.org/m-and-a-by-industries/</a> <a href="#fnref:7" class="footnote-back-ref">↩</a></p></li> <li id="fn:8"><p>Popp, Karl Michael (2013). Mergers and Acquisitions in the Software Industry - foundations of due diligence. Norderstedt: Books on demand. ISBN 978-3-7322-4381-5. <a href="978-3-7322-4381-5" target="_blank">978-3-7322-4381-5</a> <a href="#fnref:8" class="footnote-back-ref">↩</a></p></li> <li id="fn:9"><p>Karl M. Popp and Ralf Meyer (2010). Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Norderstedt, Germany: BOD. ISBN 978-3-8391-6983-4. <a href="978-3-8391-6983-4" target="_blank">978-3-8391-6983-4</a> <a href="#fnref:9" class="footnote-back-ref">↩</a></p></li> <li id="fn:10"><p>Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. Vol. 46:3 <a href="#fnref:10" class="footnote-back-ref">↩</a></p></li> <li id="fn:11"><p>Software Ecosystem: Understanding an Indispensable Technology and Industry. Cambridge, MA: MIT Press. 2003. ISBN 0-262-13432-2. <a href="0-262-13432-2" target="_blank">0-262-13432-2</a> <a href="#fnref:11" class="footnote-back-ref">↩</a></p></li> </ol>