Industry Information

Software Publishing Industry 

• Nature of the Industry
• Working Conditions
• Employment
• Occupations in the Industry
• Training and Advancement
• Outlook
• Earnings
• Sources of Additional Information

Significant Points:

• Employment is projected to increase 68 percent between 2004 and 2014, ranking software publishers as the third fastest growing industry in the economy.
• Computer specialists account for 52 percent of all workers.
• Job opportunities will be excellent for most workers; professional workers enjoy the best prospects, reflecting continuing demand for higher level skills needed to keep up with changes in technology.

All organizations today rely on computer and information technology to conduct business and operate more efficiently. Computer software is needed to run and protect computer systems and networks. Some 10,000 establishments are engaged primarily in computer software publishing or publishing and reproduction. Software publishing establishments carry out the functions necessary for producing and distributing computer software, such as designing, providing documentation, assisting in installation, and providing support services to software purchasers. The term publishing often implies the production and distribution of information in printed form. The software publishing industry also produces and distributes information, but usually it ?publishes? or distributes its information by other methods, such as by CD-ROM?s, the sale of new computers already preloaded with software, or through distribution over the Internet, rather than in printed form. These establishments may design, develop, and publish, or publish only. Establishments providing access to software for clients from a central host site, designing custom software to meet the needs of specific users, or involved in mass duplication of software are classified elsewhere. (For more information, see the statement on computer systems design and related services found elsewhere in the Career Guide.)

Software publishing establishments that design and publish prepackaged software may develop operating system software as well as word processing and spreadsheet packages, games and graphics packages, data storage software, and Internet-related software tools such as search engines and Web browsers—the software that permits browsing, retrieval, and viewing of content from the Internet. Some establishments may install the software package on a user?s system and provide customer support.

Software is often divided into two main categories—applications software and systems software. Applications software includes individual programs for computer users—such as programs for word processing or for developing and maintaining spreadsheets and databases. Systems software, on the other hand, includes the operating system and all of the related programs that enable the computer to function. The Internet has vastly altered the complexion of the software industry over the last decade. Much applications and system software is developed for use on the Internet and for connections to the Internet.

Organizations are constantly seeking to implement technologies which will improve efficiency. Enterprise resource planning (ERP) software is such an example. ERP consists of cross-industry applications that automate a firm?s business processes. Common applications include human resources, manufacturing, and financial management software. Examples of more recent applications are software to manage customer relations and a firm?s sources of supply, known as customer relationship management (CRM) and supply-chain management software. Enterprise resource planning software has traditionally been implemented by large organizations with vast computer networks.

Electronic business (e-business) is any process that a business organization conducts over a computer network. Electronic commerce (e-commerce) is that part of e-business that involves the buying and selling of goods and services. With the growth of the Internet and the expansion of e-commerce, there is significant demand for e-commerce software that enables businesses to become as efficient as possible.

This widespread use of the Internet and intranets also has led to greater focus on the need for computer security. The robust growth of e-commerce increases this concern, as firms seek to attract as many potential customers as possible to their Web sites. Security threats range from damaging computer viruses to online credit card fraud. As a result, organizations and individual computer users are demanding software, such as firewalls and antivirus software, that secures their computer networks or individual computer environments.

Most workers in this industry work in clean, quiet offices. Given the technology available today, however, more work can be done from remote locations using modems, fax machines, e-mail, and especially the Internet.

About 2 percent of the workers in software publishing firms work part time, compared with 16 percent of workers throughout all industries. For some professionals, evening or weekend work may be necessary to meet deadlines or solve problems. Professionals working for large establishments may have less freedom in planning their schedule than do consultants for very small firms, whose work may be more varied.

Employees who work at video terminals for extended periods may experience musculoskeletal strain, eye problems, stress, or repetitive motion illnesses, such as carpal tunnel syndrome.

In 2004, there were about 239,000 wage and salary jobs in the industry. While the industry has both large and small firms, the average establishment in software publishing is relatively small; over half of the establishments employed fewer than 5 workers. About 75 percent of jobs, however, are found in a small number of establishments that employ 50 or more workers (chart 1). Many small establishments in the industry are startup firms that hope to capitalize on a market niche.

Relative to the rest of the economy, there are significantly fewer workers 45 years of age and older in software publishing establishments; this industry?s workforce remains younger than most, with large proportions of workers in the 25-to-44 age range (table 1). This reflects the industry?s explosive growth in employment since the early 1980s. The huge increase in employment afforded numerous opportunities to younger workers possessing the latest technical skills.

Providing a wide array of information services to clients requires a diverse and well-educated workforce. The majority of workers in the software publishing industry are professional and related workers, such as computer software engineers and computer programmers (table 2). This major occupational group accounts for 60 percent of the jobs in the industry, reflecting the emphasis on high-level technical skills and creativity. By 2014, the employment share of professional and related occupations is expected to be even greater, while the employment share of office and administrative support jobs, currently accounting for 11 percent of industry employment, is projected to fall.

Programmers write, test, and maintain the detailed instructions, called programs or software, that computers must follow to perform their functions. These programs tell the computer what to do—which information to identify and access, how to process it, and what equipment to use. Programmers write these commands by breaking down each operation into a logical sequence of steps, converting the instructions for those steps into a language that the computer understands. While some still work with traditional programming languages like COBOL, object-oriented programming languages such as C++ and Java, computer-aided software engineering (CASE) tools, and artificial intelligence tools now are being used to create and maintain programs. These languages and tools allow portions of code to be reused in programs that require similar routines. Many programmers also customize purchased software or create better software to meet a client?s specific needs.

computer software engineers design, develop, test, and evaluate software programs and systems. Although programmers write and support programs in new languages, much of the design and development now is the responsibility of software engineers or software developers. Software engineers must possess strong programming skills, but are more concerned with developing algorithms and analyzing and solving programming problems than with actually writing code. These professionals develop many types of software, including operating systems software, network distribution software, and a variety of applications software. Computer systems software engineers coordinate the construction and maintenance of a company's computer systems, and plan their future growth. They develop software systems for control and automation in manufacturing, business, and other areas. They research, design, and test operating system software, compilers—software that converts programs for faster processing—and network distribution software. Computer applications software engineers analyze users' needs and design, create, and modify general computer applications software or specialized utility programs. They develop software solutions. For example, video game programmers are software engineers who plan and write video game software.

Computer support specialists provide technical assistance, support, and advice to customers and users. This group of occupations includes workers with a variety of titles, such as technical support specialists and help-desk technicians. These troubleshooters interpret problems and provide technical support for software and systems. Support specialists may work either within a company or other organization or directly for a computer software vendor. They answer telephone calls, analyze problems using automated diagnostic programs, and resolve difficulties encountered by users.

Other computer specialists include a wide range of professionals who specialize in operation, analysis, education, application, or design for a particular piece of the system. Many are involved in the design, testing, and evaluation of network systems such as local area networks (LAN), wide area networks (WAN), the Internet, and other data communications systems. Specialty occupations reflect an emphasis on client-server applications and end-user support; however, occupational titles shift rapidly to reflect new developments in technology.

A growing number of marketing and sales workers also are employed in this industry. In order to compete successfully and gain customers and clients in the online world, the presentation and features of software and other content related to information technology becomes increasingly important. For example, publishers of software that provides connections to the Internet must be able to differentiate their products from those of their competitors. Marketing and sales workers are responsible for promoting and selling the products and services produced by the industry.

Occupations in the software publishing industry require varying levels of education. The level of education and type of training required depend on the employer?s needs, which often change due to changes in technology and business conditions. As demonstrated by the current demand for workers with skills related in computer security, employers often scramble to find workers capable of implementing ?hot? new technologies. Another factor driving employers? needs is the timeframe within which a project must be completed.

Computer programmers commonly hold a bachelor?s degree; however, there are no universal educational requirements. Some hold a degree in computer science, mathematics, or information systems, while others have taken special courses in computer programming to supplement their study in fields such as accounting, inventory control, or other areas of business. Because employers? needs are so varied, a 2-year degree or certificate may be sufficient for some positions so long as applicants possess the right technical skills.

Most computer software engineers have at least a bachelor?s degree and broad knowledge and experience with computer systems and technologies. Usual degree concentrations for applications software engineers are computer science or software engineering; for systems software engineers, usual concentrations are computer science or computer information systems. Graduate degrees are preferred for some of the more complex software engineering jobs.

Persons interested in becoming a computer support specialist generally need only an associate degree in a computer-related field, as well as significant hands-on experience with computers. They also must possess strong problem-solving and analytical skills as well as excellent communication skills because troubleshooting and helping others are such vital parts of the job. And because there is constant interaction on the job with other computer personnel, customers, or employees, computer support specialists must be able to communicate effectively in writing, often by e-mail, or in person. They also must possess strong writing skills when preparing manuals for employees and customers. As technology continues to improve, computer support specialists must constantly strive to stay up to date and acquire new skills if they wish to remain in the field.

The size of the firm and the local demand for workers also may influence training requirements for specific jobs. Smaller firms may be willing to train informally on the job, whereas larger organizations may pay for formal training or higher education. For example, many marketing and sales workers are able to secure entry-level jobs with little technical knowledge but quickly acquire knowledge of their company?s products and services through on-the-job training. With more formal education, employees may advance to completely different jobs within the industry. Education or training in a specialty area, such as information security, may provide new opportunities for the worker and allow the establishment to offer new services.

Continuing technological advances in the computer field have led to demand for workers with a higher level of skill and expertise. As information technology continues to expand into more sectors of the economy, employers are demanding workers posses some expertise in other fields. For example, a computer software engineer interested in working for a bank should have some expertise in finance as they integrate new technologies into the bank?s computer system. Employers, hardware and software vendors, colleges and universities, private training institutions, and professional computing societies offer continuing education and professional development seminars. The Institute of Electrical and Electronics engineers Computer Society, for example, recently created a certification process for software development professionals who possess a bachelor?s degree and work experience that demonstrates a body of knowledge, and who pass a written examination.

Software publishing offers advancement opportunities for all workers who keep up with changing technology. For example, computer support specialists may move into computer programmer positions and, later, into computer software engineer jobs. This advancement usually results from work experience and continued training and education.

Entry-level computer programmers usually start working with an experienced programmer to update existing code, generate lines of one portion of a larger program, or write relatively simple programs. They then advance to more difficult programming and may become project supervisors, or move into higher management positions within the organization. Many programmers who work closely with systems analysts advance to systems analyst positions.

Computer software engineers who show leadership ability also can become project managers or advance into management positions, such as manager of information systems or even chief information officer. Technical support specialists may advance by developing expertise in a particular program or software that can lead to opportunities as a programmer or software engineer.

Many experienced workers also have opportunities to move into sales positions as they gain knowledge of specific products and services. Computer programmers who write accounting software, for example, may use their specialized knowledge to sell such products to similar firms. Also, computer support specialists providing technical support for an operating system may eventually market that product, based on their experience and knowledge of the system.

Employment in the software publishing industry has more than doubled since 1990. As firms continue to invest heavily in information technology and demand for specialized software rises, software publishing is projected to be the third fastest growing industry in the U.S. economy over the next decade. Wage and salary employment is expected to increase by 68 percent between 2004 and 2014, almost five times the 14 percent growth projected for all industries combined. Even in difficult economic times, organizations continue to make investments in software. Software boosts productivity, increases efficiency, and, in some cases, reduces the need for workers. Growth will not be as rapid as it was during the technology boom of the 1990s, however, as the software industry begins to mature and as routine work is increasingly outsourced overseas.

An increasing reliance on information technology, combined with falling prices of computers and related hardware, means that individuals and organizations will continue to invest in applications and systems software to maximize the return on their investments in equipment and to fulfill their growing computing needs. Such needs include the expansion of electronic commerce, a growing reliance on the Internet, faster and more efficient and secure internal and external communication, and the development of new technologies and applications. Given the rate at which the software publishing industry is expected to grow, and the increasing integration and application of software in all sectors of the economy, job opportunities should be excellent for most workers. Professional workers should enjoy the best opportunities, reflecting employers? continuing demand for higher level skills to keep up with changes in technology. However, employment growth may be tempered somewhat by offshore outsourcing, as companies contract out more of the routine tasks to foreign countries, where labor costs are lower, in an attempt to remain competitive.

Today, there is demand for software products ranging from educational software to assist people learning a new language to home networking software and firewalls to maintain security. Yet, new growth areas will continue to arise from rapidly evolving technologies and business forces. The increasing uses of the Internet, the proliferation of Web sites, and mobile technology such as the wireless Internet have created demand for a wide variety of new software. The market for educational software and entertainment software, which includes video games, is also expected to experience robust growth over the next decade.

The way the Internet is used is constantly changing, and so is the software required to run the new and emerging computer applications. Expanding electronic commerce, for example, has changed the way companies transact business. Business-to-business commerce is automating many steps in the transaction of business between companies, allowing many firms to operate more efficiently. Businesses are moving their supply networks online and participating in and developing online marketplaces. The sustained growth of electronic commerce as well as the growing uses of intranets and extranets will drive demand for increasingly sophisticated software tools geared towards these technologies. And, as the amount of electronic information stored and accessed continues to grow, new applications and security needs will increase demand for database software. Demand for an even wider array of software applications also should increase as companies continue to expand their capabilities, integrate new technologies, and develop new applications.

One significant factor contributing to growth in software is computer security. Organizations invest heavily in software to protect their information and secure their systems from attack. And, as more individuals and organizations are conducting business electronically, the importance of maintaining computer system and network security will increase, leading to greater demand for security software.

Given the increasingly widespread use of information technologies and the overall rate of growth expected for the software publishing industry, most occupations should grow very rapidly, although some faster than others. The most rapid job increases will occur among computer specialists such as computer software engineers, as firms continue to install sophisticated computer networks, set up Internet and intranet sites, and engage in electronic commerce, and as consumers continue to explore and use vast amounts of applications software.

Employees in the software publishing industry generally command higher earnings than the national average. All production or nonsupervisory workers in the industry averaged $1,342 a week in 2004, significantly higher than the average of $529 for all industries. This reflects the concentration of professionals and specialists who often are highly compensated for their skills or expertise. Given the pace at which technology advances in this industry, earnings can be driven by demand for specific skills or experience. Earnings in selected occupations in software publishing appear in table 3.

As one might expect, education and experience influence earnings as well. For example, annual earnings of computer software engineers, applications ranged from less than $50,270 for the lowest 10 percent to more than $116,340 for the highest 10 percent in May 2004. Managers usually earn more because they have been on the job longer and are more experienced than their staffs, but their salaries, too, can vary by level and experience. Accordingly, annual earnings of computer and information systems managers ranged from less than $65,800 for the lowest 10 percent to more than $145,600 for the highest 10 percent in May 2004. Earnings also may be affected by size, location, and type of establishment, hours and responsibilities of the employee, and level of sales.

[Please note that the earnings and salary data listed here is usually from government sources and may be dated, so please make adjustments accordingly. If you would like to access current salary data for literally thousands of occupations, access our Salary Wizard.]

Further information about computer careers is available from:

• Association for Computing Machinery (ACM), 1515 Broadway, New York, NY 10036. Internet: http://www.acm.org
• National Workforce Center for Emerging Technologies, 3000 Landerholm Circle SE., Bellevue, WA 98007. Internet: http://www.nwcet.org

Information on the certified software development professional program can be found at:

• Institute of Electrical and Electronics Engineers Computer Society, Headquarters Office, 1730 Massachusetts Ave. NW., Washington, DC 20036-1992. Internet: http://www.computer.org/certification

Information on the following occupations can be found in the 2006-07 Occupational Outlook Handbook:

• Computer and information systems managers
• Computer programmers
• Computer scientists and database administrators
• Computer software engineers
• Computer support specialists and systems administrators
• Computer systems analysts

*Source: Bureau of Labor Statistics, U.S. Department of Labor. Used by permission.