RESEARCH PUBLICATIONS

Top 100 software companies in the United States 2010

The largest software companies in the United States are Microsoft, IBM and Oracle. Together they also form the Top 3 software firms in the world. The ten largest software companies in the US made close to 120 billion USD revenues from software in 2009.

Microsoft is unrivaled as the largest software company in the list, raking in twice the software revenues of IBM. Oracle held on to its acquisitive strategy and strengthened its 3rd position. Oracle and CA were the only companies in the top 10 to increase software revenues in 2009. In the rest of the list, there are companies with impressive growth rates.

Fast growing US software companies

Intel is the fastest growing software company in the United States. The processor-maker decided to go software a few years ago, and every year a software company is added to its ranks. Intels recent growth spurt can be attributed to the acquisition of Wind River, an embedded software gem that had been shining in several editions of the Software Top 100. The 2010 acquisition of anti-virus  software maker  McAfee will Intel into the Top 25 US Software makers. And as Intel continues to earn billions in free cashflows from its successful chip business, we predict more large acquisitions in the near future: with Intel's buying power, a Top 10 position is among the possibilities.
Salesforce.com has been one of the fastest growing software companies in the last 3 years. Now reaching over 1 billion USD software revenues, the company continues to show stellar performance, driven by its successful online business model. The online CRM company, that says it is not a software company but a services company, is now the 20th software company in the US.
Security software was one of the sectors that grew modestly in 2009, despite the economic downturn. McAfee managed to increase revenues with more than 20%, partly as a result of takeovers and partly organic. In 2009, the main acquisition concerned MX Logic, a deal worth 140 million USD. In August 2010 McAfee itself was acquired by Intel.
Blackboard and Rosetta Stone, both active in educational software were also among the fastest growing software companies last year. Blackboard went public in 2004 and has more than threefolded revenues since then by automating schools from front-end to back-end. Its stock price doubled, and Blackboard software is now used in 5,000 educational institutions worldwide.
Rosetta Stone makes world leading language learning software for 31 languages. The company went public on the NYSE in 2009. In 2010, Rossetta Stone expects revenues to increase with around 7%.
Red Hat is just outside the fast growth top 5, nevertheless the company showed strong growth of 18.3%. The world's largest Linux distributor in terms of revenues, and a leading open source company, Red Hat is now the 37th largest software company in the US.

Largest employers

Despite layoffs in the sector during the crisis, the technology companies are important employers. Four companies employ over 100,000 people worldwide. IBM leads the list, employing close to 400,000.
During the last three decades, the IT industry has been the fastest growing industry in terms of employee headcount, and IT jobs generally pay premium salaries as qualified IT personnel is hard to find. For those interested, a short list of software employers currently hiring can be found on our jobs page.

Outlook

Roughly 75% of the world's largest software companies have their roots in the United States. Although we expect the software industry in Europe and Asia to grow at a faster pace, this will not impact the hegemony of the US in the world of software, because the American giants have enough free cashflow to buy attractive fast-growing software companies in Europe and Asia, and pick up some US neighbours as well. That said, 2011 will be a year with many acquisitions.
The successes of Software-as-a-Service and Open Source software are likely to continue for many years ahead, giving momentum to the likes of Salesforce.com and Red Hat, and resulting in higher positions in the next edition of the US Software Top 100.

Links

The previous edition of the US Software Top 100. The article accompanying the previous edition of the US Software Top 100.