Technology Software

A Brief History of the Software Industry

To say that the software industry has come a long way since its inception in the mid-fifties would be a gross understatement. Initially coined as a prank, the word €software€ implies any and all operational computations that occur within the hardware of a machine, often designed as a bridge or human interface between a machine and its operator. The boost in computer manufacturing and sales, leading up to the era of the personal computer brought with it an equally exponential hike in software companies striving to introduce products that pushed the new machines to their functional limits. The race to develop the most user friendly and feature packed software suites spurred the expansion of the software industry in the late seventies and eighties. Though initially only designed to serve military or governmental record keeping applications, software designers soon learned that the real revenue was in the consumer market, a market that was showing one of the strongest margins for growth of any industry at the time.

The concept of the personal computer was revolutionary in its own right and saw consumers flock towards it in groves; by the mid-nineties, all skepticism regarding how well the consumer market may adapt to the new product, if at all, was pushed aside as the personal computer found its way into every household, fast becoming a necessity rather than an accessory.

The contributions of the software industry in driving the sales of the personal computer and establishing it as a viable and popular electronic cannot be overstated. Large software development companies were not discouraged by the fact that the PC revolution meant that they would be developing their products for an audience that had little to no technological expertise. Instead they capitalized on it; the uninitiated target market, in general, proved to be more receptive and welcoming of the new software products and services, even if the initial stock market performance of said software companies remained lackluster for a long time. This fact could be chalked up to the initial lack of confidence that investors generally feel regarding entirely new products. The markets of the time were not very appreciative of the potential of the €services€ industry. In addition to that fact, the new software manufacture industry was pushing a product that was intangible, a product the likes of which had never been seen before. Investor skepticism is somewhat understandable if one takes into account the beginning stutters faced by the software industry. The dismal stock market performance of dotcom stocks at the time also did not help the software industry as would-be investors grouped the two services as being similar, hence the lack of investment.

However, once major hardware manufacturers began backing software companies and their products, investing not only money, but also resources, data, capital, and invaluable insight and inferences, the software industry soon stabilized and began presenting itself as a viable industry responsible for the manufacture of a product that had consistent, strong demand in the consumer electronics segment; a demand not influenced by factors that commonly affect other consumer products. This sort of impervious demand and solid sales performance helped enhance consumer and investor interest, subsequently leading to more investment capital, better products, higher sales and increasing growth and profits.

The software manufacture industry today shows no signs of fizzling out. Innovation and new product development is taking place at a breathtaking pace. The rate at which completely new products are designed and launched in the market sometimes becomes unsettling as it is difficult to keep track of all the new features, abilities and enhancements offered by new software. One aspect that is most interesting regarding the future plans of this industry, the prediction made by many analysts, that optimized and functional software will soon begin to make overpowered hardware a redundancy. Even though hardware and software are complementary products; neither can function without the other, however, the increasing rate at which software companies are devoting themselves to ideas such as cloud computing leads many to question the relevance (or necessity) of powerful hardware in every consumer electronic device to execute tasks.

For many, successful optimization of software to bare-bones hardware is the way forward. Microsoft is the leading company in the software and service industry.

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