Computer Software

The worldwide distribution of application development, maintenance and management services of all kinds is evident in the results of the 2007 Software 500 survey. More companies list system integration services/IT consulting вЂ" including a number of offshore services providers вЂ" as their primary business sector. System integration was cited by 29 Software 500 companies as their primary business sector, and employment in that sector increased 15% from 2005 to 2006, the survey ranking year.

Overall, total 2007 Software 500 revenue of $394 billion worldwide for 2006 represents growth of 3.5% from the previous year, when total Software 500 revenue was $381 billion.

The software industry remains among the most important in the knowledge worker economy, evidenced by the growth in total employees in the 2007 Software 500, which rose 14.7% to 2,914,480. Software is projected to be the third fastest-growing industry in the U.S. economy over the next decade, according to the Bureau of Labor Statistics at the U.S. Department of Labor. Wages are expected to increase more than 60% through 2014 вЂ" about five times the 14% growth projected for all industries combined.

The AeA, a trade association representing all segments of the high-tech industry, in its ninth annual Cyberstates: 2006 report released in April 2006, estimated total high-tech industry employment at 5.6 million workers in 2005. (See www.aeanet.org/cyberstates.) Thus software and services would be employing from 45% to 50% of all high-tech workers.

In the 2007 Software 500, outside of system integration services, employee growth was strong in search/portal tools (a 65% increase for nine companies), messaging/communications (a 27% increase for six companies), security tools/systems (26% for 22 companies), human resource/workforce management systems (24% for 18 companies), and application/managed service providers (20% for seven companies).

The top of the 2007 Software 500 sees few changes, as IBM again takes the No. 1 position with a 3.4% increase in software and services revenue to $66.5 billion. Microsoft placed second, with 8.8% growth to $39.3 billion in software and services revenue. Again EDS, Hewlett-Packard Co., Accenture and Computer Sciences Corp. were ranked three through six as the largest system integration firms continue their important role of providing IT services.

Growth Leaders

Among the fastest-growing companies, with more than $1 billion in revenue, LogicaCMG plc, an IT services company with more than 40,000 employees at No. 16, stands out with 65% revenue growth. Also standing out is Symantec, at No. 20, with 60.4% growth for its software security business, and Gemalto NV, at No. 36, with 51% growth for its leadership in digital security. Infosys Technologies Ltd., the services company based in India, grew at a 35% rate, a little bit slower than its 50% growth rate of a year earlier but still very healthy.

Autonomy Corp. at No. 127, a leader in “meaning-based computing” or the use of unstructured information, shows the most impressive gains among companies with $100 million to $1 billion in revenue and revenue growth of 161%. The next growth leader in this category is Interwoven, Inc., at No. 144 a top player in intelligent content management, with revenue growth of 79%. salesforce.com grew 76% to reach No. 109, evidence that its on-demand customer relationship management (CRM) and application platform strategies are working. In the last four years of the Software 500, salesforce.com has risen by 138 positions, making it one of the growth leaders in that time.

Also impressive in this revenue range is ANSYS, Inc., with growth of 67% for the engineering simulation products provider. FAST, at No. 158, saw growth of 62% as its enterprise search products surpass 3,500 installations. (FAST has moved up 111 positions in four years on the Software 500.) Secure Computing Corp, the security appliance and software supplier at No. 152, grew at 62% with its products offering protection against identity theft, intruders, hackers, malicious software and viruses.

In the category of $30 million to $100 million in revenue, Smith Micro Software, with its communications software for the wireless industry, is the leader with revenue growth of 169%. The Smith Micro product line spans multiple operating system platforms, including Windows, Pocket PC, Macintosh, Palm, Unix and Linux, and its file compression covers JPEG, MPEG and MP3 platforms; the firm’s StuffItÐ'® product is a de facto industry standard. (Smith Micro has moved up 175 positions in four years on the Software 500.) Acronis, with storage management and disk imaging software, reached 255 with 150% growth. Aztecsoft Ltd., at No. 266 with 99% growth, is finding success with its full-lifecycle product engineering services for customers in the Fortune 500 as well as many software product companies.

Omniture, at No. 210, grew at an 87% clip, finding success with its focus on online business optimization in many industries, including automotive, business-to-business (B2B), education, entertainment, financial services, retail and telecommunications. (Omniture has risen 200 positions in the last four years of the Software 500.) QlikTech International, the business intelligence success story out of Sweden, saw 79% growth and reached No. 268. EPAM Systems Inc., the software engineering outsourcing provider with development centers in Russia, Hungary, Belarus, and the Ukraine, grew 75% to reach No. 227. (EPAM has moved up 128 positions in four years on the Software 500.) And SafeBoot Corp., with its mobile data security focus, grew 70% to reach No. 275.

In the $10 million to $30 million revenue range, J.L. Halsey Corp., offering technology products for marketers, makes a dramatic entry with growth of more than 1,000% to reach No. 310. The company in 2005 acquired Lyris and EmailLabs, and in 2006 acquired ClickTracks and Hot Banana, to show dramatic growth. VFA, Inc., at No. 320, also showed dramatic growth of more than 300%, on the strength of its capital planning and asset management products. Apptix, with on-demand messaging and collaboration, found traction with 143% growth to reach No. 326.

System Integration Services/IT Consulting

Of the companies in this sector above $1 billion in revenue, the growth for LogicaCMG was fueled in part by acquisitions including Unilog, the French IT service firm, and WM-data, the Swedish IT consulting firm. The company is winning many types of outsourcing contracts as well. Cognizant Technology Solutions saw growth of 61%, doing well with its focus on application maintenance services, data warehousing, software development and integration. Most of the company’s development