Further fragmentation of software industry

Name

Fragmentation of software industry

What

Fragmentation of the software industry will result in increased competition and decrease in monopolies. This may increase innovation, as firms will have to innovate to keep market share. Quality of software and services will increase. Open source software will dominate.

Enablers

Government policies Policies geared towards less IP protection and free markets may increase fragmentation of the industry. On the other hand, increase in IP rights may help smaller firms gain market share by allowing them to market a unique product without the fear that a dominant firm will reproduce a comparable product. Free trade agreements may increase fragmentation by allowing companies in emerging countries to participate in the global market.

Consumer Demand Demand for innovative software will fuel smaller companies to have a position in the market simply by creating a unique product.

Economy Growth in economies will allow emerging markets to increase education and develop high quality products for a cheaper price, increasing fragmentation of the industry.

Inhibitors

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. 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.

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. Paradigms

Experts

Industry Experts

Timing

Industry structure is slowly but continuously changing.