RESEARCH STARTER

Computer software industry

The computer software industry encompasses the development, maintenance, and distribution of software applications and systems that enable computers to perform various tasks. This industry includes several subcategories, such as computer applications, gaming software, and operating systems, and has grown in tandem with the computer hardware sector. As of 2022, the industry generated approximately $593 billion in global revenues, highlighting its significance in the modern economy.

Software is essential for everyday computing, allowing users to interact with devices ranging from personal computers to smartphones efficiently. Historically, the industry's roots can be traced back to the early 19th century and have evolved through pivotal inventions like punch cards and early programming languages. Today, software is integral to numerous fields, including education, healthcare, and business, facilitating operations and data management.

With the rise of the internet, cloud computing has transformed how software is accessed and utilized, enabling users to leverage applications without the need for local installation. The industry's future looks promising, with a projected growth rate of 6.5% globally between 2022 and 2027. As demand for software continues to increase, there will likely be abundant job opportunities, particularly for software developers and quality assurance analysts, although some traditional programming roles may decline due to offshoring. Overall, the computer software industry remains a dynamic and vital component of the information technology landscape.

Full Article

Industry Snapshot

Summary

In modern computing terms, "software" usually refers to nearly all aspects of a computer except for the physical hardware or components. Thus, software includes a computer's operating systems and graphic user interfaces (GUIs), firmware designed to control electronic hardware components, web browsers, and stand-alone programs called applications, such as Microsoft Word or Apple's GarageBand. The software industry developed in parallel with the computer hardware industry. The two industries depend on each other to survive, and many companies offer both hardware and software products. With the development of cloud computing, internet-based firms such as Google have pioneered software that users can access online without downloading code permanently onto their own computers.

History of the Industry

Throughout history, people have sought more efficient ways to organize useful information. By the early 1800s, mathematical calculation tables had become standard tools adopted by many professions, including accountants, astronomers, sailors, and mathematicians. However, such tables were frequently inaccurate and difficult to use. This situation led inventor Charles Babbage to design several automatic calculating machines, culminating in his design for the analytical engine in 1834. According to Babbage's original designs, punch cards would have been used to program the analytical engine. Although the project was never completed, Babbage's design inspired mathematician Ada Lovelace to write an extremely perceptive article describing how numbers could be used to represent other forms of data, such as musical notes or the letters of the alphabet. Lovelace also developed a rudimentary computer program for the analytical engine and is considered by many to be the world's first computer programmer.

Punch-card technology represents another forerunner that would lead to the development of modern software. In 1890, former United States Census Bureau employee Herman Hollerith started the Tabulating Machine Company, later known as International Business Machines (IBM). Hollerith had previously developed a punch-card system that allowed thin paper punch cards to store population statistics. Early punch cards were used to control automated looms in the textile industry, but Hollerith was the first person to perfect the use of punch cards to store many different types of data.

As engineers, scientists, and physicists began experimenting with computer technology, they also developed new methods for storing and manipulating information. Early computers, such as the Electronic Numerical Integrator and Computer (ENIAC), one of the world's first electronic computers, used a mixture of vacuum tubes, plug boards, and punch cards to store and input computer instructions. Developed in 1937, the 1,800-square-foot (176-square-meter) ENIAC was so large and complex that it weighed 30 tons and took days to reprogram.

In 1944, IBM unveiled the Automatic Sequence Controlled Calculator (ASCC) at Harvard University, where it was known as the Harvard Mark 1. Early computer scientists such as Grace Murray Hopper and Howard Aiken soon began creating programs for the Mark 1, working together to write complex mathematical code that was entered into the computer via a series of punch cards. These computer scientists are considered the first programmers in the United States.

Throughout the 1950s, early computer scientists frequently collaborated to develop a standard computer programming language compatible with specific computer hardware. For example, some groups focused on sharing common programming routines for IBM computers, while others concentrated on models manufactured by Digital Equipment Corporation (DEC). In 1959, Hopper led a team assembled by the US Department of Defense in designing the Common Business-Oriented Language (COBOL), one of the earliest universal programming languages. COBOL is still used by businesses, governments, and military organizations worldwide. In addition, COBOL is still used in operating systems such as Microsoft Windows and UNIX to run business applications and can be integrated with contemporary systems and languages such as Java or Python.

As computer hardware continued to evolve, software programming became more widespread, thanks in part to the development of the integrated circuit in 1959 and the invention of the floppy disk. These important milestones helped bring the computer widespread acceptance in the business world, and in 1976, Steve Wozniak began to market the Apple I, the world's first personal desktop computer. As computers became fully integrated into homes and businesses, programmers simplified the graphic user interface (GUI), leading to the development of Microsoft Windows in 1983 and the Mac OS in 1984. Software has since become a critical aspect of modern life, with specialized programs developed for every industry and electronic product, from household robotic devices like the Roomba to smartphones like the iPhone.

Although the software industry suffered as a result of the dot-com bubble collapse during the late 1990s and early 2000s, as did most computer-based industries, the continued expansion of the internet offered companies many new opportunities to expand their businesses. As powerful computers became more accessible and affordable, developers could sell their products directly to consumers online, bypassing wholesalers and retail locations, dramatically reducing their costs. This reduced cost led to an explosion of low-cost shareware and free, open-source software projects such as Linux or the Mozilla Firefox browser. Countless people became involved in the software industry, from software engineers and beta testers to hobbyists who create free software in their spare time.

The Industry Today

As computers have become ubiquitous in modern life, so has software. Without software, computers would be practically unusable to the average consumer. Software allows consumers of any age and skill range, from children to older adults, to access the internet, play games, connect with others for work or play, and edit films and photos. Meanwhile, as advanced smartphones and netbook computers allow more people to access the internet, software developers gained many new platforms through which to offer their products.

The growing and thriving software industry has evolved to meet the ever-changing requirements of a global society that constantly relies on advanced technology. From handheld gaming systems and electronic appliances to cellular phones and personal computers, software is included in countless devices and utilized by practically every profession. The right software, for example, makes it much easier for architects to design buildings, for doctors to manage their patients' medical records, for teachers to contact parents and students, and for investors to trade stocks. Because of software, businesses and individuals are increasingly dependent on computers to store and manage information.

On the internet, software enables people to communicate. Web designers use software to create websites and online content, and web browsers provide users with easy access to nearly unlimited amounts of information in various formats, including social networking sites, newspapers, online government records, and email. However, with this rise also came a number of computer viruses, malware, and spyware. Individuals may hack into home networks, businesses' intranets, and school and government records, often in an attempt to change records, defraud banks, or launch denial-of-service attacks, which have crippled numerous websites and led to many instances of identity theft. These malicious activities led to the growth of many companies, such as Norton, McAfee, and Trend Micro, that specialize in antivirus software designed to block and remove malicious programs while repairing infected files. Such companies also provide software designed to protect businesses and users from hacking attacks that may disrupt computer systems or allow malicious access to personal or confidential information.

Software is sold in many retail outlets, including electronics, office-supply, and video game stores. Virtually all modern computers come with preinstalled software, including the operating system, web browsers, word processors, and trial versions of premium software such as Microsoft Office. Software companies and individual entrepreneurs also offer their products online. Some individuals create software as a hobby in their spare time and distribute it online for free, a one-time fee, or an ongoing subscription. Proprietary software that can be downloaded and tried for free, sometimes in a limited or trial version, is known as shareware.

The first decades of the twenty-first century saw the growth of open-source software, including such popular programs as Linux and Firefox. Open-source software is software whose source code is made freely available for use, study, and modification. As a result, it is developed and improved by an extended community of programmers that may include company employees, hobbyists, and professionals working in their spare time. Even profitable companies such as Google have developed and released free open-source software, such as Google's Chromium project, which includes much of the code behind the company's free Chrome web browser. Major corporations also make use of open-source software developed elsewhere. For example, Mac OS X includes code taken from FreeBSD, an open-source version of UNIX.

The development of cloud computing (a model for delivering hosted services over the internet) also altered the software landscape. Companies such as Google and Microsoft can offer users the ability to access software programs directly through the internet, including database software and word processors. Users can also store information in a fashion that makes it available through the "cloud." Thus, cloud computing makes available, at any site with internet access, both users' information and software capable of manipulating that information. This availability frees users from needing to use a dedicated machine or to carry their data with them. For example, students writing essays can use Google Docs to write and edit their work, accessing their documents from computers at their local libraries, homes, or schools. They need not worry about whether these computers utilize particular software applications, nor must they carry data-storage devices to transport their files. As long as a computer is running a relatively current version of a common Web browser, it can access and modify students' files.

Other companies offered cloud computing software for specialized applications and businesses, including human resources software and accounting programs. This software has made it much easier for employees and small-business owners to access their data at any time. A local contractor, for example, can access spreadsheets with account information from an office computer, a laptop, or even a smartphone while on a job site. Cloud computing is relatively young, but it experienced fast, widespread adoption among many types of users, and creative software developers can take advantage of this evolving technology to create new and unique programs.

Industry Outlook

Overview

Software has grown to control many aspects of the technology people use daily. The software industry plays a tremendous role in nearly every other industry, in schools and governments, and, increasingly, in daily life. As technology evolves, software will remain necessary to allow users access to the information encoded within. Thus, computer software is closely tied to most economic activities in the Information Age, including both business and leisure. As a result, despite periodic alterations in revenue models that may cause temporary deviations, the software industry is expected to continue its rapid growth.

Software offerings became increasingly robust in the first decades of the twenty-first century, and many new programs were created for specialized purposes within specific industries. For example, architectural firms use computer-aided design (CAD) software to design new homes; artists, photographers, and graphic designers use image-editing software such as Photoshop; and filmmakers use programs such as Final Cut Pro to edit films. In addition, many businesses employ software developers or hire external firms and consultants to develop specialized software tailored to each company's needs. This is especially true for internet-based businesses and companies engaged in extensive e-commerce transactions, which became a major part of virtually all kinds of retail operations and many other kinds of sales by the late 2010s.

As e-commerce expands, online criminal activity has grown alongside it. This has led in turn to robust growth in the cybersecurity industry, which is engaged in blocking hacker attacks, email spam, and industrial espionage and in deleting or repairing infected computer files. Antivirus software is widely used by businesses, governments, schools, and individuals and is poised to continue to grow along with general online activity.

Many new software firms are created every year. As the cost of software development has fallen for many firms, individual entrepreneurs, software publishers, and hardware manufacturers have continued to develop innovative technologies. At the same time, however, major operating systems and professional-grade business suites have become extremely complex. A major new release of the Mac OS or Windows requires years of effort and untold millions of dollars in development costs. Thus, even as much of the software market has become more accessible to start-ups, some segments remain dominated by large companies. Nevertheless, many computer hardware companies, software publishers, internet firms, and even cellphone manufacturers release specialized software development kits to encourage software engineers to develop new products and services, since they know that a platform is only as good as the software that runs on it.

New software products are increasingly being released through open-source platforms and nonprofit organizations such as the Mozilla Foundation. These groups release free, open-source software online. They have very few paid employees and instead rely on an army of volunteer programmers, software engineers, and beta testers to perfect and refine their software offerings. Even without a focus on profits, many free software products have become extremely popular.

Software has become a global enterprise. Many software companies, including large firms such as Microsoft, have opened overseas development, testing, and customer-support facilities. Other companies outsource duties such as beta testing and technical support to overseas firms. At the same time, as computer usage expands—especially in the developing world—many new overseas companies are being formed to meet the specific needs of their home countries. The demand for software will undoubtedly continue to expand as people become more dependent on computer technology. Software is also increasingly used for educational purposes, with schools and universities offering many Web-based software options, as well as traditional software programs that help students learn important new skills.

Growth in the software industry also occurs in video games and mobile phone services. Smartphones such as the Motorola Droid, which runs Google's Android operating system, and Apple's iPhone, which runs a modified version of Mac OS X, offered entrepreneurs new avenues to develop and market software, including mobile games, music players, browsers, email clients, and maps. They also included business tools, such as software allowing users to accept credit card payments directly from their smartphones. Mobile smartphones, tablets, and laptops were increasingly used to distribute educational software. Another area of growth is applications that provide health care workers with essential information, including medical dictionaries, anatomy guides, and diagnosis codes.

The software industry will continue to grow, with many opportunities for entrepreneurs to develop successful new software. As the barriers to entry into the lucrative industry continue to fall away, many new software companies will be founded by innovative programmers. Anyone with the right dedication and imagination can learn software programming and, with the right mix of innovative creativity, hard work, and a little luck, can prosper in the computer software industry.

Employment Advantages

The computer software industry is expected to continue its rapid growth in the coming years. Growth projections for the industry are high; Statista predicted a 4.6 percent growth in the global industry between 2026 and 2030. It is expected that employment opportunities in the software industry as a whole will be higher than average. The number of jobs for software developers, quality assurance analysts, and testers was expected to increase especially fast, with the Bureau of Labor Statistics (BLS) forecasting 15 percent growth from 2024 to 2034.

It should be noted that some jobs in the computer and IT industry are expected to experience a decline in US-based employment. In particular, the number of jobs for computer programmers was predicted to decrease by 6 percent from 2024 to 2034. The BLS attributes this to the fact that computer programming can be done remotely, so US-based employers may hire programmers in other countries to take advantage of lower wages.

Prospective employees in the computer software industry are usually professionals with advanced degrees, although few jobs require more than a bachelor's degree for an entry-level position, and entrepreneurs of every educational background can find success by developing innovative software on their own. In either case, people working in this field should pursue educational opportunities to keep up with the constant evolution of software technology.

Annual Earnings

Software companies frequently offer more generous benefits and salaries than do companies in other industries. According to the BLS, the median annual salary for nonmanagerial employees in the computer and IT industry was $105,990 in May 2024, higher than the median wage of $49,500 for occupations in all industries. Software developers in particular earned even higher wages in 2024, with a median annual salary of $131,450.


Bibliography

"Computer and Information Systems Managers." Occupational Outlook Handbook, Bureau of Labor Statistics, US Dept. of Labor, 28 Aug. 2025, www.bls.gov/ooh/management/computer-and-information-systems-managers.htm. Accessed 27 Jan. 2026.

"Computer and Information Technology Occupations." Occupational Outlook Handbook, Bureau of Labor Statistics, US Dept. of Labor, 28 Aug. 2025, www.bls.gov/ooh/computer-and-information-technology/home.htm. Accessed 27 Jan. 2026.

Dale, Nell, and John Lewis. Computer Science Illuminated. 8th ed., Jones & Bartlett Learning, 2025.

Hall, Patrick A. V., and Juan Fernández-Ramil. Managing the Software Enterprise: Software Engineering and Information Systems in Context. Thomson Learning, 2007.

Johnston, Jessica. Technological Turf Wars: A Case Study of the Computer Antivirus Industry. Temple UP, 2009.

Lightstone, Sam. Making It Big in Software: Get the Job, Work the Org, Become Great. Prentice Hall, 2010.

Lopp, Michael. Being Geek: The Software Developer's Career Handbook. O'Reilly Media, 2010.

"Software and Information Technology Industry." Select USA, International Trade Administration , U.S. Department of Commerce, www.trade.gov/selectusa-software-and-information-technology-industry. Accessed 27 Jan. 2026.

"Software--Worldwide." Statista, www.statista.com/outlook/tmo/software/worldwide. Accessed 27 Jan. 2026.

Yu, Eileen. "Global Security Software Revenue to Hit US$10.5B." ZDNet, CBS Interactive, 24 Apr. 2008, www.zdnet.com/article/global-security-software-revenue-to-hit-us10-5b. Accessed 27 Jan. 2026.

Full Article

Industry Snapshot

Summary

In modern computing terms, "software" usually refers to nearly all aspects of a computer except for the physical hardware or components. Thus, software includes a computer's operating systems and graphic user interfaces (GUIs), firmware designed to control electronic hardware components, web browsers, and stand-alone programs called applications, such as Microsoft Word or Apple's GarageBand. The software industry developed in parallel with the computer hardware industry. The two industries depend on each other to survive, and many companies offer both hardware and software products. With the development of cloud computing, internet-based firms such as Google have pioneered software that users can access online without downloading code permanently onto their own computers.

History of the Industry

Throughout history, people have sought more efficient ways to organize useful information. By the early 1800s, mathematical calculation tables had become standard tools adopted by many professions, including accountants, astronomers, sailors, and mathematicians. However, such tables were frequently inaccurate and difficult to use. This situation led inventor Charles Babbage to design several automatic calculating machines, culminating in his design for the analytical engine in 1834. According to Babbage's original designs, punch cards would have been used to program the analytical engine. Although the project was never completed, Babbage's design inspired mathematician Ada Lovelace to write an extremely perceptive article describing how numbers could be used to represent other forms of data, such as musical notes or the letters of the alphabet. Lovelace also developed a rudimentary computer program for the analytical engine and is considered by many to be the world's first computer programmer.

Punch-card technology represents another forerunner that would lead to the development of modern software. In 1890, former United States Census Bureau employee Herman Hollerith started the Tabulating Machine Company, later known as International Business Machines (IBM). Hollerith had previously developed a punch-card system that allowed thin paper punch cards to store population statistics. Early punch cards were used to control automated looms in the textile industry, but Hollerith was the first person to perfect the use of punch cards to store many different types of data.

As engineers, scientists, and physicists began experimenting with computer technology, they also developed new methods for storing and manipulating information. Early computers, such as the Electronic Numerical Integrator and Computer (ENIAC), one of the world's first electronic computers, used a mixture of vacuum tubes, plug boards, and punch cards to store and input computer instructions. Developed in 1937, the 1,800-square-foot (176-square-meter) ENIAC was so large and complex that it weighed 30 tons and took days to reprogram.

In 1944, IBM unveiled the Automatic Sequence Controlled Calculator (ASCC) at Harvard University, where it was known as the Harvard Mark 1. Early computer scientists such as Grace Murray Hopper and Howard Aiken soon began creating programs for the Mark 1, working together to write complex mathematical code that was entered into the computer via a series of punch cards. These computer scientists are considered the first programmers in the United States.

Throughout the 1950s, early computer scientists frequently collaborated to develop a standard computer programming language compatible with specific computer hardware. For example, some groups focused on sharing common programming routines for IBM computers, while others concentrated on models manufactured by Digital Equipment Corporation (DEC). In 1959, Hopper led a team assembled by the US Department of Defense in designing the Common Business-Oriented Language (COBOL), one of the earliest universal programming languages. COBOL is still used by businesses, governments, and military organizations worldwide. In addition, COBOL is still used in operating systems such as Microsoft Windows and UNIX to run business applications and can be integrated with contemporary systems and languages such as Java or Python.

As computer hardware continued to evolve, software programming became more widespread, thanks in part to the development of the integrated circuit in 1959 and the invention of the floppy disk. These important milestones helped bring the computer widespread acceptance in the business world, and in 1976, Steve Wozniak began to market the Apple I, the world's first personal desktop computer. As computers became fully integrated into homes and businesses, programmers simplified the graphic user interface (GUI), leading to the development of Microsoft Windows in 1983 and the Mac OS in 1984. Software has since become a critical aspect of modern life, with specialized programs developed for every industry and electronic product, from household robotic devices like the Roomba to smartphones like the iPhone.

Although the software industry suffered as a result of the dot-com bubble collapse during the late 1990s and early 2000s, as did most computer-based industries, the continued expansion of the internet offered companies many new opportunities to expand their businesses. As powerful computers became more accessible and affordable, developers could sell their products directly to consumers online, bypassing wholesalers and retail locations, dramatically reducing their costs. This reduced cost led to an explosion of low-cost shareware and free, open-source software projects such as Linux or the Mozilla Firefox browser. Countless people became involved in the software industry, from software engineers and beta testers to hobbyists who create free software in their spare time.

The Industry Today

As computers have become ubiquitous in modern life, so has software. Without software, computers would be practically unusable to the average consumer. Software allows consumers of any age and skill range, from children to older adults, to access the internet, play games, connect with others for work or play, and edit films and photos. Meanwhile, as advanced smartphones and netbook computers allow more people to access the internet, software developers gained many new platforms through which to offer their products.

The growing and thriving software industry has evolved to meet the ever-changing requirements of a global society that constantly relies on advanced technology. From handheld gaming systems and electronic appliances to cellular phones and personal computers, software is included in countless devices and utilized by practically every profession. The right software, for example, makes it much easier for architects to design buildings, for doctors to manage their patients' medical records, for teachers to contact parents and students, and for investors to trade stocks. Because of software, businesses and individuals are increasingly dependent on computers to store and manage information.

On the internet, software enables people to communicate. Web designers use software to create websites and online content, and web browsers provide users with easy access to nearly unlimited amounts of information in various formats, including social networking sites, newspapers, online government records, and email. However, with this rise also came a number of computer viruses, malware, and spyware. Individuals may hack into home networks, businesses' intranets, and school and government records, often in an attempt to change records, defraud banks, or launch denial-of-service attacks, which have crippled numerous websites and led to many instances of identity theft. These malicious activities led to the growth of many companies, such as Norton, McAfee, and Trend Micro, that specialize in antivirus software designed to block and remove malicious programs while repairing infected files. Such companies also provide software designed to protect businesses and users from hacking attacks that may disrupt computer systems or allow malicious access to personal or confidential information.

Software is sold in many retail outlets, including electronics, office-supply, and video game stores. Virtually all modern computers come with preinstalled software, including the operating system, web browsers, word processors, and trial versions of premium software such as Microsoft Office. Software companies and individual entrepreneurs also offer their products online. Some individuals create software as a hobby in their spare time and distribute it online for free, a one-time fee, or an ongoing subscription. Proprietary software that can be downloaded and tried for free, sometimes in a limited or trial version, is known as shareware.

The first decades of the twenty-first century saw the growth of open-source software, including such popular programs as Linux and Firefox. Open-source software is software whose source code is made freely available for use, study, and modification. As a result, it is developed and improved by an extended community of programmers that may include company employees, hobbyists, and professionals working in their spare time. Even profitable companies such as Google have developed and released free open-source software, such as Google's Chromium project, which includes much of the code behind the company's free Chrome web browser. Major corporations also make use of open-source software developed elsewhere. For example, Mac OS X includes code taken from FreeBSD, an open-source version of UNIX.

The development of cloud computing (a model for delivering hosted services over the internet) also altered the software landscape. Companies such as Google and Microsoft can offer users the ability to access software programs directly through the internet, including database software and word processors. Users can also store information in a fashion that makes it available through the "cloud." Thus, cloud computing makes available, at any site with internet access, both users' information and software capable of manipulating that information. This availability frees users from needing to use a dedicated machine or to carry their data with them. For example, students writing essays can use Google Docs to write and edit their work, accessing their documents from computers at their local libraries, homes, or schools. They need not worry about whether these computers utilize particular software applications, nor must they carry data-storage devices to transport their files. As long as a computer is running a relatively current version of a common Web browser, it can access and modify students' files.

Other companies offered cloud computing software for specialized applications and businesses, including human resources software and accounting programs. This software has made it much easier for employees and small-business owners to access their data at any time. A local contractor, for example, can access spreadsheets with account information from an office computer, a laptop, or even a smartphone while on a job site. Cloud computing is relatively young, but it experienced fast, widespread adoption among many types of users, and creative software developers can take advantage of this evolving technology to create new and unique programs.

Industry Outlook

Overview

Software has grown to control many aspects of the technology people use daily. The software industry plays a tremendous role in nearly every other industry, in schools and governments, and, increasingly, in daily life. As technology evolves, software will remain necessary to allow users access to the information encoded within. Thus, computer software is closely tied to most economic activities in the Information Age, including both business and leisure. As a result, despite periodic alterations in revenue models that may cause temporary deviations, the software industry is expected to continue its rapid growth.

Software offerings became increasingly robust in the first decades of the twenty-first century, and many new programs were created for specialized purposes within specific industries. For example, architectural firms use computer-aided design (CAD) software to design new homes; artists, photographers, and graphic designers use image-editing software such as Photoshop; and filmmakers use programs such as Final Cut Pro to edit films. In addition, many businesses employ software developers or hire external firms and consultants to develop specialized software tailored to each company's needs. This is especially true for internet-based businesses and companies engaged in extensive e-commerce transactions, which became a major part of virtually all kinds of retail operations and many other kinds of sales by the late 2010s.

As e-commerce expands, online criminal activity has grown alongside it. This has led in turn to robust growth in the cybersecurity industry, which is engaged in blocking hacker attacks, email spam, and industrial espionage and in deleting or repairing infected computer files. Antivirus software is widely used by businesses, governments, schools, and individuals and is poised to continue to grow along with general online activity.

Many new software firms are created every year. As the cost of software development has fallen for many firms, individual entrepreneurs, software publishers, and hardware manufacturers have continued to develop innovative technologies. At the same time, however, major operating systems and professional-grade business suites have become extremely complex. A major new release of the Mac OS or Windows requires years of effort and untold millions of dollars in development costs. Thus, even as much of the software market has become more accessible to start-ups, some segments remain dominated by large companies. Nevertheless, many computer hardware companies, software publishers, internet firms, and even cellphone manufacturers release specialized software development kits to encourage software engineers to develop new products and services, since they know that a platform is only as good as the software that runs on it.

New software products are increasingly being released through open-source platforms and nonprofit organizations such as the Mozilla Foundation. These groups release free, open-source software online. They have very few paid employees and instead rely on an army of volunteer programmers, software engineers, and beta testers to perfect and refine their software offerings. Even without a focus on profits, many free software products have become extremely popular.

Software has become a global enterprise. Many software companies, including large firms such as Microsoft, have opened overseas development, testing, and customer-support facilities. Other companies outsource duties such as beta testing and technical support to overseas firms. At the same time, as computer usage expands—especially in the developing world—many new overseas companies are being formed to meet the specific needs of their home countries. The demand for software will undoubtedly continue to expand as people become more dependent on computer technology. Software is also increasingly used for educational purposes, with schools and universities offering many Web-based software options, as well as traditional software programs that help students learn important new skills.

Growth in the software industry also occurs in video games and mobile phone services. Smartphones such as the Motorola Droid, which runs Google's Android operating system, and Apple's iPhone, which runs a modified version of Mac OS X, offered entrepreneurs new avenues to develop and market software, including mobile games, music players, browsers, email clients, and maps. They also included business tools, such as software allowing users to accept credit card payments directly from their smartphones. Mobile smartphones, tablets, and laptops were increasingly used to distribute educational software. Another area of growth is applications that provide health care workers with essential information, including medical dictionaries, anatomy guides, and diagnosis codes.

The software industry will continue to grow, with many opportunities for entrepreneurs to develop successful new software. As the barriers to entry into the lucrative industry continue to fall away, many new software companies will be founded by innovative programmers. Anyone with the right dedication and imagination can learn software programming and, with the right mix of innovative creativity, hard work, and a little luck, can prosper in the computer software industry.

Employment Advantages

The computer software industry is expected to continue its rapid growth in the coming years. Growth projections for the industry are high; Statista predicted a 4.6 percent growth in the global industry between 2026 and 2030. It is expected that employment opportunities in the software industry as a whole will be higher than average. The number of jobs for software developers, quality assurance analysts, and testers was expected to increase especially fast, with the Bureau of Labor Statistics (BLS) forecasting 15 percent growth from 2024 to 2034.

It should be noted that some jobs in the computer and IT industry are expected to experience a decline in US-based employment. In particular, the number of jobs for computer programmers was predicted to decrease by 6 percent from 2024 to 2034. The BLS attributes this to the fact that computer programming can be done remotely, so US-based employers may hire programmers in other countries to take advantage of lower wages.

Prospective employees in the computer software industry are usually professionals with advanced degrees, although few jobs require more than a bachelor's degree for an entry-level position, and entrepreneurs of every educational background can find success by developing innovative software on their own. In either case, people working in this field should pursue educational opportunities to keep up with the constant evolution of software technology.

Annual Earnings

Software companies frequently offer more generous benefits and salaries than do companies in other industries. According to the BLS, the median annual salary for nonmanagerial employees in the computer and IT industry was $105,990 in May 2024, higher than the median wage of $49,500 for occupations in all industries. Software developers in particular earned even higher wages in 2024, with a median annual salary of $131,450.


Bibliography

"Computer and Information Systems Managers." Occupational Outlook Handbook, Bureau of Labor Statistics, US Dept. of Labor, 28 Aug. 2025, www.bls.gov/ooh/management/computer-and-information-systems-managers.htm. Accessed 27 Jan. 2026.

"Computer and Information Technology Occupations." Occupational Outlook Handbook, Bureau of Labor Statistics, US Dept. of Labor, 28 Aug. 2025, www.bls.gov/ooh/computer-and-information-technology/home.htm. Accessed 27 Jan. 2026.

Dale, Nell, and John Lewis. Computer Science Illuminated. 8th ed., Jones & Bartlett Learning, 2025.

Hall, Patrick A. V., and Juan Fernández-Ramil. Managing the Software Enterprise: Software Engineering and Information Systems in Context. Thomson Learning, 2007.

Johnston, Jessica. Technological Turf Wars: A Case Study of the Computer Antivirus Industry. Temple UP, 2009.

Lightstone, Sam. Making It Big in Software: Get the Job, Work the Org, Become Great. Prentice Hall, 2010.

Lopp, Michael. Being Geek: The Software Developer's Career Handbook. O'Reilly Media, 2010.

"Software and Information Technology Industry." Select USA, International Trade Administration , U.S. Department of Commerce, www.trade.gov/selectusa-software-and-information-technology-industry. Accessed 27 Jan. 2026.

"Software--Worldwide." Statista, www.statista.com/outlook/tmo/software/worldwide. Accessed 27 Jan. 2026.

Yu, Eileen. "Global Security Software Revenue to Hit US$10.5B." ZDNet, CBS Interactive, 24 Apr. 2008, www.zdnet.com/article/global-security-software-revenue-to-hit-us10-5b. Accessed 27 Jan. 2026.

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