Computer Software 4/1/2013
QUARTERLY INDUSTRY UPDATE
Opportunity: Investments in CRM, ERP Software Top Priorities
Customer relationship management (CRM) software surpassed enterprise resource planning (ERP) applications as the top priority among businesses planning software investments the next two years, according to a Gartner survey released in March 2013. The results may be driven by increasing emphasis on improving customer experience. Office productivity applications were also identified as a top investment priority. About 60 percent of North American organizations surveyed said they expected to increase their budgets the next two years for software-as-a-service (Saas) or public cloud software.
Industry Impact
Demand for particular types of enterprise software is typically driven by business priorities and end-user trends. Rising interest in CRM and ERP applications may cause some software companies to shift priorities in their product development efforts.
INDUSTRY INDICATORS
US corporate profits, which indicates corporate demand for computer software, rose 8.7 percent in the third quarter of 2012 compared to the same period in 2011.
US retail sales for electronics and appliance stores, a potential measure of demand for computer software, decreased 0.7 percent in the first two months of 2013 compared to the same period in 2012.
Total US revenue for software publishers rose 21.4 percent in the fourth quarter of 2012 compared to the previous quarter.
Total US revenue for computer systems design and related services rose 6.1 percent in the fourth quarter of 2012 compared to the previous quarter.
FAST FACTS
Companies in this industry create computer software and provide computer programming services.
Major companies include US-based companies Cognizant Technology Solutions, IBM Software, Microsoft, Oracle, and Symantec, as well as international giants like Infosys Technologies (India), Nintendo (Japan), and SAP (Germany).
Packaged software products are generally programs that can be installed and operated by the customer with little or no assistance, such as an operating system.
Primary software customers include consumers, businesses, government agencies, educational institutions, and computer OEMs.
The finances of most software companies revolve around the cash flow dynamics of developing a software product.