Software Publishers


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Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 10,700 software publishers in the US produce and distribute computer software. Major product categories include application software publishing, system software publishing, and resale of merchandise. Firms are increasingly delivering software through cloud-based services (Software-as-a-Service or SaaS), in addition to on-premise products.

Technology Drives Constant Change And Investment

The information technology industry is characterized by rapid change and constant evolution.

Talent Shortage

Software developers are in short supply and many publishers are resource-constrained due to a shortage of skilled workers.

Industry size & Structure

The average software publisher employs 46 workers and generates about $35 million annually.

    • The software publishing industry consists of about 10,700 firms with 14,200 establishments that employ over 500,000 workers and generate about $376 billion annually.
    • The industry is concentrated at the top; the top 50 companies account for about 69% of industry revenue.
    • Large companies include Microsoft, Oracle, IBM, and Symantec. Large firms may generate a substantial percentage of sales overseas.
    • Companies that offer primarily cloud-based services may be classified under the Census as Data Processing, Hosting, and Related Services. Software publishers may offer hybrid products that combine on-premise, private cloud, and public cloud services.
                                    Industry Forecast
                                    Software Publishers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    Apr 28, 2022 - Pandemic-driven Growth Slows For Some Firms
                                    • Some software publishers that thrived during the pandemic-driven e-commerce boom are struggling as consumers return to brick-and-mortar stores. Grocery delivery and pick-up service Instacartm for example, said that it will cut its valuation by 40% to $24 billion, citing the “market turbulence” that has roiled technology companies. In addition, top executives have left, including two presidents, one of whom resigned after just three months. Sales growth slowed sharply, to 15% in 2021 from 330% in 2020, according to market research firm1010data.
                                    • The technology sector’s eight superstar cities (San Francisco; San Jose, CA; Austin, TX; Boston; Seattle; Los Angeles; New York; and Washington, D.C.) slightly increased their share of the tech sector’s total nationwide employment in 2020 even as hopes rose for greater dispersion of tech work, according to Brookings Metro. The cities accounted for half of the nation’s technology sector job creation during the pandemic’s first year. Brookings Metro notes, however, that tech sector employment growth slowed in all but one (New York) of the eight superstars in 2020 while it increased in many smaller places.
                                    • Many software developers won't return to their old desks on a permanent basis when offices reopen, according to a CompTIA analysis of job-posting data. Many key technology postings added between December 2021 and January were remote jobs. Software developers and IT support specialists topped the list, followed by web developers and systems engineers/architects. Many technologists are also embracing a hybrid workweek, which allows them to leverage the benefits of both remote and in-office work. Some 85% of technologists find the prospect of hybrid work anywhere from somewhat to extremely desirable, including 94% of younger technologists (those between 18 and 34 years old), according to Dice’s 2021 Technologist Sentiment Report.
                                    • The Supreme Court blocked the Biden administration from enforcing its vaccine-or-test requirements for businesses with 100 or more employees. "Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly," the court wrote in an unsigned opinion. "Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category," the court wrote.
                                    • Facebook CEO Mark Zuckerberg announced that employees who decided to work remotely, but left Silicon Valley, would be paid salaries reflective of their new residences, rather than their previous higher salaries. The high cost of living in many areas, particularly in the Silicon Valley, could induce many employees to move to lower cost metropolitan areas to substantially improve their standards of living. Software developers are highly paid, with a national median salary of $107,500. Some experts say, however, that the purchasing power of the high salaries is effectively discounted by 40% or more by hyper-inflated costs of living in top technology centers like Silicon Valley. The purchasing power of software developer salaries in both San Jose and San Francisco is well below the national median, according to figures calculated by NewGeography.com using US Bureau of Labor Statistics data and the Urban Research Institute. When adjusted for purchasing power, only one of the metropolitan areas among the top 10 in nominal software developer salary, Seattle, remains in the top ten.Telecommuting may benefit both firms and their employees. Facebook CEO Mark Zuckerberg announced that employees who decided to work remotely, but left Silicon Valley, would be paid salaries reflective of their new residences rather than their previous higher salaries. The high cost of living in many areas, particularly in the Silicon Valley, could induce many employees to move to lower cost metropolitan areas to substantially improve their standards of living. Software developers are highly paid, with a national median salary of $107,500. Some experts say, however, that the purchasing power of the high salaries is effectively discounted by 40% or more by hyper-inflated costs of living in top technology centers like Silicon Valley. The purchasing power of software developer salaries in both San Jose and San Francisco is well below the national median, according to figures calculated by NewGeography.com using US Bureau of Labor Statistics data and the Urban Research Institute. When adjusted for purchasing power, only one of the metropolitan areas among the top 10 in nominal software developer salary, Seattle, remains in the top ten.
                                    • More than 80% of company leaders surveyed by research and advisory firm Gartner said that their organizations plan to permit employees to work remotely at least part of the time after reopening from the COVID-19 pandemic. About 47% of respondents said they intend to allow employees to work remotely on a full-time basis, while 43% would grant flex days and 42% would provide flex hours.
                                    • The shift to cloud computing is not expected to slow when workers return to their offices. “We’ve seen a three-to-five-year speed-up in what is now an expectation around digital access,” said Dominic Delmolino, vice president for technology and innovation for Amazon Web Services. Demand is likely to increased due to the recognition that high accessibility and high security are possible with cloud computing, Delmolino added.
                                    • Pandemic-related lockdowns pushed companies to automate some jobs, and software publishers are likely to benefit as that trend accelerates. Automation will displace an additional 8.4 million American workers by 2030, according to McKinsey & Company. That’s a 23% increase from the management consulting firm's pre-COVID scenario. About 80% of business leaders say that they are accelerating automation of their services in response to the pandemic, and 43% anticipate reducing their workforces because of new technology, according to a World Economic Forum report. Jobs in sales, office support, and food and customer service will face the largest losses.
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