Security Software Industry Trends

Faster Computers Permit New Applications

The rapid increase in computer power creates new software opportunities, such as photo and video editing. Most developers of user applications create successive versions of the same product, taking advantage of greater computer speed to improve products by making them faster or capable of handling new functions.

Foreign Staff Outsourcing

Because the high cost of US programmers, some software companies are outsourcing part of their production work to other countries, especially India. Developments in communication technology and software that allows multiple users to collaborate have made foreign outsourcing easy.

Linux

Linux is an operating system with "open source code"; that is, all parts are open to users to examine and modify if they desire. (The source code for Windows operating systems is a closely-guarded secret.) Linux is a low-cost and powerful alternative to proprietary versions of UNIX that are used to operate computer servers, and has become more popular in recent years.

Video Games

One software sector with high growth in recent years is video game development. The US retail market for video games is now larger than the movie industry. Companies develop video games for PCs and various "consoles" -- specialty computers like PlayStation, Xbox, and GameCube, made by Sony, Microsoft, and Nintendo, respectively. US retail sales of video games were over $10 billion in 2005, according to the NPD Group, whose tally includes console and portable hardware, software and accessories.

Video Game Producers Depend on Hits

Because of the high cost to develop and market computer games with the sophisticated visual features demanded by consumers, sales of individual games must also be high. Most revenue for new games comes within 60 to 90 days of release.

Copyright Protection

Copyright infringement and piracy are widespread in the computer software industry because of the ease of copying most products and the difficulty of detecting copyright infringement. While software companies try to build anti-piracy features into their products or into computers themselves, consumers have resisted these moves because they usually make products more difficult to use. To ensure authenticity, some software is now sold in a non-functional form and must be "activated" by connection with a company Internet site.

Distribution Costs