Computerworld has an article quoting a Gartner analyst saying the software industry is caught in a "vortex of insatiable mergers and acquisitions" that is creating huge "super vendors" selling highly integrated offerings.
The article suggests this industry consolation will lead to "architectural mediocrity" and less innovation.
At the same time, many consider this the golden era of small software companies. There are thousands of new, small "apps" companies generating real revenue. Industry analysts are upping their app revenue forecasts almost monthly. A recent forecast has U.S. mobile app sales alone at over $18 billion in 2014.
VC firms also continue to back software startups. In Q2 2010 alone, 144 U.S. software companies raised $689 million from VCs.
The software industry, like most other industries, is developing a barbell industrial structure: a few global giant corporations on one end, a narrow middle consisting of mid-sized firms, and a large and growing number of small, micro and even one-person businesses on the other end.
Our industry structure category describes a number of barbell industries including my favorite, the beer industry.
The Barbell is trend 16 in the Intuit 2020 Report.
I think the Super Vendors like Microsoft, HP and Dell have grown through affiliate marketing in which proprietary firmware is included on partnered products.
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