Japan was second, followed by Germany, United Kingdom, and France. The computer software industry is characterized by significant expenses for upfront development, marketing, and technical support infrastructure for initial versions of software products. Subsequent products based on the first version become much less expensive to develop because they are based on the same technical development. Gross margins in the software business are often 70 to 80 percent because there is very little in expenses needed to support a software company. Furthermore, software projects often involve long lead times between different versions.
Software publishers write application software for a specific operating system.
This creates a standardized format and ensures programs work with one another. Competitive Dynamics Software publishers are entrenched competitors with powerful sales and distribution networks. They also ave large installed bases of software users. Small companies dissolve or merge with larger companies because of smaller user base, less technical support, and smaller product development budgets. Major Software Categories Major categories include spreadsheets, word processing, data base, utilities, graphics, drawing, entertainment.