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Computer Software
Career Overview

Industry Overview

Computer software products accomplish discrete tasks and are sold as complete packages. Some computer software products are so-called applications, such as word processing and Web browsing. Computer software also includes operating systems, such as Windows, and utilities.

Businesses and individual consumers are the main purchasers of computer software, which is sold through both retail and business-to-business channels. In either case, companies that sell computer software are intensely focused on the needs and desires of customers. Probably the quickest way to talk yourself out of a job in this segment is to make the technology seem more important than the end user.

Marketing is critical to the success of any software product, partly because there are so many companies competing in the software market and partly because computers are still new to a lot of people. In fact, in most companies that produce software, the marketing department calls the shots.

At the other end of the totem pole, technical writers are employed at most computer software companies to write user documentation, either for publication in the form of manuals or, increasingly, as online help. The industry also employsóin descending order of technical expertiseósoftware testers, customer service reps, sales personnel, and staff for the usual coterie of business functions, from HR to accounting.

Linux
Linux system software, the centerpiece of the open-source movement (which champions free software for all and welcomes and encourages developer contributions to the free software), is finally making a splash in the business world. More companies, such as Credit Suisse First Boston and Merrill Lynch, are seeing the benefits of not having to pay for software and upgrades and beginning to adopt Linux environments. Computer makers such as Dell and Hewlett-Packard are shipping PCs and servers loaded with Linux. And big business-software providers such as BEA Systems, SAP, and Veritas are making products that run on Linux.

Consolidation
The software industry has been teeming with M&A; activity of late. Business Objects recently purchased Crystal Decisions, Hyperion Solutions bought Brio, EMC bought Documentum and VMware, and Oracle is trying to acquire PeopleSoft. The reason for all this activity: Buying competitors is a good way to increase market shareóand buying them now, at the beginning of an expected economic recovery, is smarter than buying them after their stock prices have risen too far.

The Internet
The Internet has meant a sea change in the software industry. Many software users now download their purchases from software providersí websites, forgoing diskettes and packaging and getting straight to business. And the subscription ASP (application service provider) model (a.k.a. the pay-as-you-go model), in which users access software and databases that are stored on the vendorsí servers via the Web, is proving attractive in areas from gaming to business software. Indeed, companies including Oracle, Siebel Systems, and Salesforce.com are all seeing success using the pay-as-you-go model.

The computer software market is most commonly segmented according to the type of work a product does. A few of the major market segments are listed below, along with the names of a few companies that are active in each.

System Software
Microsoft's Windows is by far the dominant example in his categoryóbut not the only one. Apple's OS is still alive and well, and Unix is a force in the server market, as is Linux. Red Hat has actually made a business out of selling a version of Linux, which is also available free on the Internet.

Productivity
Productivity includes word processing, spreadsheets, presentations, database management, graphic design, and other applications that help people do their jobs. Key players: Adobe (PageMaker, PhotoShop, Illustrator), Microsoft (Word, PowerPoint, Excel), Autodesk (computer-aided design software).

Education
Educational software helps your kids learn to read, teaches you about geography or a foreign language, stimulates logical thinking, and so on. This category also comprises children's educational games, the nascent electronic-book industry, teaching resources, and music instruction. Key players: Disney, Microsoft, Scholastic.

Finance
Financial software includes applications for small business and personal accounting, personal finance, and tax preparation. Key players: Intuit (maker of Quicken), Microsoft.

Internet
Internet software includes more than the two leading browsers, which are produced by Netscape and Microsoft. It includes software for creating websites, from companies such as Macromedia.

Utilities
Utilities help you keep your computer running by diagnosing and fixing problems. Symantec (Norton Utilities) is a leading developer.

Games
A highly competitive and extremely broad market segment, this includes role-playing software, auto and flight simulation, sports, strategy games such as chess, and children's games. Key players: Electronic Arts, Activision, Take-Two, THQ. Also, note that there are many small, thriving studios that use the bigger players for distribution and marketing, as well as big-name individual designers who will work for game companies on a project-by-project basis.

Reference
Homes, schools, and businesses are getting rid of old bound reference collections in favor of CD-ROM reference tools that offer portability, lightning-fast searches, and interactive media. This market segment includes encyclopedias, dictionaries, atlases, Internet guides, and zip code directories. Key players: Microsoft, Grolier Interactive.

The disappearance of many start-ups and Web-based companies, plus tech-industry consolidation, has resulted in layoffs and lower unemployment levels than this industry enjoyed in the 1990s. But computer technology changes rapidly, and the industry is sure to rebound as the economy recovers. The Bureau of Labor Statistics predicts that occupations in the computer software industry will be one of the fastest growing between 2003 and 2010.

Much of the activity in computer software is happening in Silicon Valley, but you also might check out opportunities in other high-tech regions including Boston, Austin, Minneapolis, New York City, Denver, Dallas, Atlanta, Boca Raton, and the Research Triangle region of North Carolina.

If you're looking for international work experience, give consumer software a close look. Foreign markets are the next big thing for software companies, who are now focusing their sights on China, Japan, Southeast Asia, Germany, and the United Kingdom. Note, however, that these opportunities are usually limited to sales and marketing, and even in these areas, culture and language differences are such that local talent usually takes precedence.

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