Software industry

History

The first company founded to provide software products and services was Computer Usage Company in 1955. Before that time, computers were programmed either by customers, or the few commercial computer vendors of the time, such as Sperry Rand and IBM.

The software 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 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. The computer/hardware makers started bundling operating systems, systems software and programming environments with their machines.

The introduction of relatively affordable microcomputers by the Digital Equipment Corporation (DEC) significantly expanded access to computing power for corporate and academic institutions worldwide. This democratization of hardware catalyzed a period of intense innovation, leading to the development of sophisticated programming languages and advanced software methodologies. As the software ecosystem for microcomputers matured, other major technology firms, most notably IBM, responded by shifting their strategies to compete in this emerging market; this industry-wide transition eventually led to the development of influential systems such as the IBM AS/400.

The industry expanded greatly with the rise of the personal computer in the latter half of the 1970s, with the TRS-80, Apple II, and Commodore PET all introduced in 1977. The affordability of computers for home use created a growing market for games, applications, and utilities. The IBM PC, introduced in 1981, became a standard for office use.

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 about unauthorized copying, since it can only be accessed through the Web, and by definition no client software is loaded onto the end user's PC.