Increase in concentration of software industry

Name

Increase in concentration of software industry

What

Increase in concentration of the software industry will result in reduced competition and increase in monopolies. This may reduce innovation, as firms no longer have to innovate to keep market share. Quality of software and services will decrease. Lobbyists will be hired by the largest firms to increase further protection from the government to keep their monopolies. Closed source software will dominate.

Enablers

Government policies Policies geared towards protection of IP rights and free –markets will increase concentration in the industry. On the other hand, lack of IP rights will give larger firms an opportunity to steal smaller firms’ ideas and exploit their economies of scale to strengthen their position.

Industry Industry leaders have the ability to hire the best talent, fueling their growth and strengthening their positions.

Consumer Demand Demand for standards by the consumer who want the same software on all computers they use (at home or in the office) and ease of understanding software made by the same company will increase monopolies.

Inhibitors

Government policies Policies that prohibit monopolies will reduce concentration. Policies that protect IP rights may give smaller firms an opportunity to gain position through copyrighting their innovative products.

Consumer Demand Demand for innovative products will give smaller firms an opportunity to gain market share by creating a unique product.

Economic forces As the economy grows, smaller companies may get a chance to get ahead while in an economic downturn, the market leaders may lose their position, opening opportunities for smaller firms to jump in.

Paradigms

As concentration increases, companies with the largest market share, such as Microsoft, will (and currently is) be the brand that consumers associate with software innovation. Microsoft will be the standard and consumers will stop looking for products designed by other companies.

Experts Industry Experts

Timing Industry structure is slowly but continuously changing.