Everything about The Software Industry totally explained
The
software industry comprises businesses involved in the
development, maintenance and
publication of
computer software. The software industry started in the mid-1970s at the time of the personal computer revolution. The industry also includes software
services, such as training and consultancy. The largest and most profitable of software companies are located in the
United States. As of 2006, the client software industry is dominated by
Microsoft.
Software Magazine's 500 list in 2005 shows the total amount of revenue brought in by software companies per locale, with the highest being
California due to
Silicon Valley and the amount of
Fortune 500 software companies residing in that area.
Overview
There are mainly two types of businesses in the software industry; those developing
proprietary software such as
Microsoft, and those developing
open source software. Developing proprietary software is costly and involves software licensing and the need to protect the software from
cracking and
piracy.
The main financial return on open source comes from selling services, such as training and support, rather than the software itself. Many contributors to open source software (especially those developing software tools) also feel that there's a significant long-term return in the form of improved resources and capabilities within the software industry. Despite doing much business in properietary software, some companies like
Sun Microsystems and
IBM participate in developing free and open source software to deter from
monopolies and take a portion of their
market share.
Sectors
Freeware
Freeware is
copyrighted computer
software which is made available for use free of charge, for an unlimited time, as opposed to
shareware where the user is required to pay (for example after some trial period or for additional functionality). Authors of freeware often want to "give something to the community", but also want credit for their software and to retain control of its future development. Sometimes when programmers decide to stop developing a freeware product, that'll give the source code to another programmer or release the product's source code to the public as
free software.
Shareware
Shareware is a
marketing method for
computer software. Shareware software is typically obtained free of charge, either by downloading from the Internet or on magazine cover-disks. A user tries out the program, and thus shareware has also been known as "try before you buy". A shareware program is accompanied by a request for payment, and the software's distribution license often requires such a payment.
Open source
Open source describes the principles and methodologies to promote open access to the
production and
design process for various goods, products, resources and technical
conclusions or advice. The term is most commonly applied to the
source code of software that's made available to the general public with either relaxed or non-existent
intellectual property restrictions. This allows users to create
user-generated software content through either incremental individual effort, or
collaboration.
Commercial
Commercial software is
computer software sold for
commercial purposes or that serves commercial purposes. Commercial software is most often
proprietary software, but
free software is also used as commercial software. All or parts of software packages and services that support commerce are increasingly made available as free software, including products from
Red Hat,
Apple Computer,
Sun Microsystems, and
Google.
Microsoft Corporation uses "commercial software", rather than "proprietary software", to describe their
business model.
Size of the Industry
Software Magazines'
Software 500 survey can be used to gauge the value of the commercial software industry. The
Software 500 survey consists of data of the top 500 software companies, as ranked by
Software Magazine. Total worldwide revenues in 2006 for companies in the
Software 500 list were $394 billion, representing a growth of 3.5% from 2005, when total Software 500 revenue was $381 billion.
Further Information
Get more info on 'Software Industry'.
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