Software Houses: Changing from Product Vendors into Solution Providers

Abstract

Integrating hitherto separate IT systems while keeping within with tight budgetary restrictions is becoming the dominant software trend in this decade.

Optimism is currently starting to spread again in software houses. However, there are marked regional differences in potential. Contrary to some forecasts, the US software houses are in the process of consolidating their already dominant position in the global market thanks to their economies of scale, combined with the network effect. Conversely, the only chance for most of their typically small European competitors to score points is in certain niches of the market.

Keywords: System software, application software, CRM, ERP, SCM, Web services

JEL Classification: L15, L81, O14, O33