Software industry

The software industry includes businesses for development, maintenance and publication of software that are using different
business models, mainly either "license/maintenance based" (on-premises) or "Cloud based" (such as SaaS, PaaS, IaaS, MaaS, AaaS,
etc.). The industry also includessoftware services, such as training, documentation, consulting and data recovery.

Contents
History
Size of the industry
Mergers and acquisitions
Business models within the software industry
See also
References
External links

History
The word "software" was coined as a prank as early as 1953, but did not appear in print until the 1960s.[1] Before this time,
computers were programmed either by customers, or the few commercial computer vendors of the time, such as UNIVAC and IBM.
The first company founded to provide software products and services wasComputer Usage Companyin 1955.[2]

The software industry expanded in the early 1960s, almost immediately after computers were first sold in mass-produced quantities.
Universities, government, and business customers created a demand for software. Many of these programs were written in-house by
full-time staff programmers. Some were distributed freely between users of a particular machine for no char
ge. 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.[3][4] 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 this model had been attempted. From the point of view of producers of some proprietary
software, SaaS reduces the concerns aboutunauthorized copying, since it can only be accessed through the Web, and by definition no
client software is loaded onto the end user's PC.

Size of the industry

According to industry analystGartner, the size of the worldwide software industry in 2013 was US$407.3 billion, an increase of 4.8%
over 2012. As in past years, the largest four software vendors were Microsoft, Oracle Corporation, IBM, and SAP respectively. [5]

Mergers and acquisitions

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 bil. USD.[6] 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 105. bil.
USD. In 2017, 2,547 deals were announced valued at $111 billion. Approaches to successfully acquire and integrate software
companies are available.[7]

[8]
Here is a list of the top ten conducted deals in the software industry:

Value of
Date Acquiror Acquiror Mid Acquiror Target Target Mid Target
Transaction
Announced Name Industry Nation Name Industry Nation
($mil)
Microsoft United Microsoft United
09/17/2013 Software Software 40,000.00
Corp States Corp States
Microsoft United Microsoft United
09/22/2008 Software Software 36,400.00
Corp States Corp States
Microsoft United Microsoft United
07/20/2006 Software Software 36,200.00
Corp States Corp States
Microsoft United Microsoft United
07/20/2004 Software Software 30,000.00
Corp States Corp States
E-
Microsoft United LinkedIn United
06/13/2016 Software commerce / 26,638.85
Corp States Corp States
B2B
Veritas Seagate Computers
United United
03/29/2000 Software Software Technology & 18,515.20
States States
Corp Inc Peripherals
Other United United
09/13/1999 Shareholders Palm Inc Software 17,901.14
Financials States States
Cyclops United Mobileye
03/13/2017 Semiconductors Software Israel 15,386.97
Holdings Inc States NV
Veritas
Symantec United United
12/16/2004 Software Software Software 13,519.67
Corp States States
Corp
United PeopleSoft United
06/06/2003 Oracle Corp Software Software 10,467.28
States Inc States

Business models within the software industry

Business models of software companies have been widely discussed.[9][10] Network effects in software ecosystems, networks of
[11]
companies, and their customers are an important element in the strategy of software companies.

See also
Software engineering
World's largest software companies
COCOMO (Constructive Cost Model)
Function point
Software development effort estimation
Comparison of development estimation software
References
1. Paul Niquette (1995). "Softword: Provenance for the Word 'Software' " (http://www.niquette.com/books/softword/tocs
oft.html). adapted from Sophisticated: The MagazineISBN 1-58922-233-4
2. Elmer C. Kubie (Summer 1994). "Recollections of the first software company". Annals of the History of Computing.
IEEE Computer Society. 16 (2): 65–71. doi:10.1109/85.279238 (https://doi.org/10.1109%2F85.279238).
3. Campbell-Kelly, Martin (2003). From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry
.
Cambridge, Massachusetts: MIT Press. p. 57.
4. Fishman, Katharine Davis (1981).The Computer Establishment(paperback 1982). New York: McGraw-Hill Book
Company. p. 268.
5. "Gartner Says Worldwide Software Market Grew 4.8 Percent in 2013"(http://www.gartner.com/newsroom/id/269631
7).
6. "M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)" (https://imaa-institute.org/m-and-a-by-i
ndustries/). Institute for Mergers, Acquisitions and Alliances (IMAA)
. Retrieved 2018-02-28.
7. Popp, Karl Michael (2013).Mergers and Acquisitions in the Software Industry - foundations of due diligence
(http://m
ergerduediligence.com/). Norderstedt: Books on demand.ISBN 978-3-7322-4381-5.
8. "M&A by Industries - Institute for Mergers, Acquisitions and Alliances (IMAA)" (https://imaa-institute.org/m-and-a-by-i
ndustries/). Institute for Mergers, Acquisitions and Alliances (IMAA)
. Retrieved 2018-02-28.
9. Karl M. Popp and Ralf Meyer (2010).Profit from Software Ecosystems: Business Models, Ecosystems and
Partnerships in the Software Industry. Norderstedt, Germany: BOD.ISBN 3-8391-6983-6.
10. Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. ol.
V
46:3
11. Software Ecosystem: Understanding an Indispensable eTchnology and Industry. Cambridge, MA, USA: MIT Press.
2003. ISBN 0-262-13432-2.

External links
"Software Industry". Words to Avoid (or Use with Care) Because They Are Loaded or Confusing. Free Software
Foundation. 2012-11-20. Retrieved 2013-01-31.

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