Software Publishers Market – Increasing Investment In Information Technology Infrastructure

To “publish” means to produce and distribute the information in printed form. Likewise, software publishers are involved into production as well as distribution of information, through other means such as information distribution over internet, CD-ROMs and sale of computers preloaded with software. Companies in software publishing could be involved in designing, developing and publishing software or only in publishing. They may additionally help with the documentation, installation and support services like language translation developing sales channel and other technical services.

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The software publishers market is concentrated with four firms controlling a majority of industry share. The firms are IBM Corporation, Oracle Corporation, SAP AG, and Microsoft Corporation. There are very few products in the software publishing market, from these major players competing among each other to attain competitive edge. Furthermore, various licensing schemes and government regulations have tend to lead customers towards brands. Thus, customers are likely to reach out to the top players first.

The revenue of the software publishing industry comes primarily from the sale of new software and software license updates. The industry is marked by a high degree of alliances. Due to low entry barriers, large number of startups enter the industry looking for capturing the niche markets. As a result, large firms such as IBM Corporation, Oracle Corporation and Microsoft Corporation, as their prominent strategy, look after acquiring the small service providers resulting in strong market share, increased product offerings and customer base, high profit margins, thus reducing the price competition.

The software publishers market is in the beginning of its growth potential and the industry is expected to grow during the forecast years and the growth would primarily be driven by mobile and cloud platforms, corporate profits and increasing investment in information technology infrastructure. Technological advancements are expected to unlock new business opportunities for this market making it inevitable for the small businesses to use the services, in order to survive in the competitive market.

Currently the software publishing industry caters to large, already established enterprises who are capable to spend for the industry offerings. Hence, the market is dominated by large businesses demanding high end services and is therefore the biggest segment for the industry. To reduce the dependency on large markets, the industry is expected to focus more on the untapped smaller markets in near future.

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Profit margin in the software publishing industry is generally high as the cost of production and depreciation is low. Since the products provided by the industry are intangible, it incurs low purchase cost as the physical media is close to vanish and internet and cloud are on an upswing. A large portion of cost goes into wages as the industry is extremely labour sensitive and requires highly skilled workforce.

When segmented geographically, Asia Pacific is the largest region in the software publishers market followed by North America. When segmented by industry, almost every industry is using software publishing services such as banking, securities and insurance, communications, media, and services, manufacturing, pharmaceuticals, and life sciences, government, retail, healthcare and utilities and others; the industries include academic institutions like research universities, and nonprofit research groups. When segmented by revenue generation through various product types, ERP software generates s lowest revenue share.