Software Publishers NAICS 513210

Jan 16, 2026 - AI Coding may Have Hit A New Phase

• Interest in AI coding tools like Claude Code has surged due to improvements in underlying AI models that let the coding tools handle longer, more complex workflows, according to GeekWire. Claude Code is a specialized AI tool that acts like a pair-programmer for software developers. Software development has emerged as the first profession to be thoroughly reshaped by large language models, as AI systems move beyond answering questions to actively doing the work, according to GeekWire. Ethan Mollick, a Wharton School of Business professor and AI researcher, said in January 2026 that the new generation of AI coding tools represent a sudden capability leap in AI in the past month or so. Mollick notes that these tools are better at self-correcting their own errors and now have "agentic harness" that helps them work around long-standing AI limitations, including context-window constraints that affect how much information models can remember.
• Revenue and margin expansion look favorable for software firms through 2029, according to Morningstar. The financial services firm expects total software revenue to increase more than 11% annually through 2029. Software industry revenue growth is derived from existing clients in the form of additional seats and new modules and from new vendors and new business formation, according to Morningstar. Pricing tends to be lumpy, as software vendors may raise prices by 10% once every three years rather than annually by 2% to 3%.

• AI and a new class of "reasoning" AI models that are computationally intensive and expensive to operate are pushing the Software-as-a-service (SaaS) industry from monthly "per seat" licenses to usage-based, pay-as-you-go pricing, according to Business Insider. It may be an economic necessity for some companies as they adjust to the cost of running AI-powered software services. A reasoning AI model is much more expensive because it doesn't just return simple responses. Reasoning models loop through steps, check their work, and do it all again — a process called inference-time compute. Every step generates new "tokens," which have to be processed. Companies are beginning to charge based on activity such as tokens consumed, queries run, automations executed, or models accessed instead of charging per user. This aligns revenue more closely with usage and ensures companies can cover their variable and rising infrastructure costs, according to Business Insider.
• Software publishers decreased prices slightly during the first nine months of 2025, according to the US Bureau of Labor Statistics (BLS). Software publishing industry employment and average wages for nonsupervisory employees increased slightly during the first eight months of 2025, according to the BLS. Software publisher sales are forecast to grow at a 6.94% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.