Global Software Market and the Software 500

Revenue at the Software Magazine's "2006 Software 500" declined 1% to $380.8 billion worldwide for 2005 from the previous year's total revenue of $383.3 billion. Total employees at the 2006 Software 500 companies declined just under 5% to 2,539,872 at the end of 2005.

Forrester Research estimates the global commercial software market at $207 billion in 2005, with the top four vendors accounting for about 34% of the revenue. 

The magnitude of growth and structural change in the enterprise software industry over the next five years will be determined by clashes between the four horsemen of software commoditization — service-oriented architecture (SOA), open source, software-as-a-service (SaaS), and offshore development — and the four fortresses of market inertia — vendor concentration, intellectual property rights, installed bases, and brand loyalty, according to Forrester Research's The Future Of Enterprise Software. The four horsemen are changing how enterprise applications are created, sold, implemented, and supported; the four fortresses slow and limit these changes. The outcome of these clashes will vary by software category, but overall prices will decline and the industry overall will descend to historically low growth rates.

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