Computer Software

The software industry is composed of programmers, designers, marketers, sellers, and others who create the programs users need and then market them and sell them. Some programs are designed for general use and mass consumption, while other programs are custom-designed for a company’s needs. Computer software companies typically provide software for a specific niche or function. For example, some companies develop software for engineers, while others develop software for traffic control.

The field of computer software can be divided into three primary segments: corporate information services (IS) departments, software vendors, and consultants. Corporate IS departments usually implement and support software and hardware products for companies that produce nontechnical items or services. They work with the individual departments or lines of businesses within the company and their software needs. They then fill gaps by creating software the company needs to make it operate more efficiently, or they reprogram and improve existing software.

People who work for software vendor companies focus on creating products for sale. These products could be mass marketed for consumers, such as tax programs, home accounting programs, or home budgeting programs. Or, they could provide enterprise software to business niches, such as the restaurant industry, medical industry, or specific departments within those industries. Consultants are independent contractors who are hired by corporations to help implement new software packages. Consultants may be individuals, or they may be a company with several consultants for hire.

While there was a need for computer software in the early days of computer use, it was not until the personal computer hit the market and exploded in the 1980s that the demand for computer software led to the development of the industry. For the first few decades of the software industry, most software was designed to run on a desktop personal computer or a laptop. By the 2000s, there were more devices that contained computer chips and therefore needed software and applications, or apps, for their use or to expand their capabilities. These devices include cell phones, global positioning devices (GPS), personal digital assistants (PDAs), smartphones, and tablet PCs and readers.

Estimated revenue in the software industry in the United States was $363.40 billion in 2024, according to Statista.com. The enterprise software sector comprised 41 percent of revenue, followed by application development software (25 percent), systems infrastructure software (22 percent), and productivity software (11 percent). Revenue in the software industry in the United States is expected to reach $444.62 billion by 2029.

The research firm D&B Hoovers reports that the 50 largest software companies in the U.S. generate about 70 percent of revenue. Microsoft (26 percent) was the industry leader in market share in 2022, with Oracle (6 percent) ranking a distant second, according to Morningstar Equity Research.

The most common jobs in the computer software industry are software engineers, software developers, programmers, cybersecurity professionals, testers or quality control personnel, software marketers, sales people, and technical writers. Workers with expertise in advanced artificial intelligence, data analytics, and cloud computing are in strong demand.