Vertical Software Industries

Abstract

The software industry (SWI) was born only a few decades ago, and is still relatively young compared to other industries. Its origins can be traced down to the decisions to unbundle some secondary parts of IBM computer development to independent software companies (Campbell-Kelly 2004). The software development was then considered a secondary activity serving the core business, which was at that time computer hardware manufacturing. This focus on hardware is still visible in the brand names of both the global information and communication technology (ICT) giants, such as IBM, and the major professional and scientific establishments of the field, such as the Association for Computing Machinery (ACM).

Gradually, however, software industry has established its position as an independent industry. Also, software business has become a specialized focus of scientific research. First, this research targeted the core of the emerging industry, i.e., independent software vendors (ISV) developing and selling independent software products and software services – these companies are often referred to as the primary software industry (BMBF 2000). The term secondary software industry refers to software business performed by companies that focus on another industry but utilize software as a part of their products or services. At different times, different vertical industries represented the key host industries for the secondary software industry: the automation industry in the 1970s, the electronics industry in the 1980s, and the telecommunication industry in the 1990s. At the moment, e.g., the automotive and to some extent the aerospace industries are the centre of attention for booming secondary software businesses.