Online Computer Software Sales in the US - Market Research Report (2013-2028)
New York, United States
Last Updated: September 2023
NAICS OD5443Revenue
$709.0bn
Past 5-Year Growth
Profit
$XX.Xbn
Employees
709k
Businesses
54,141
Wages
$XXX.Xbn
Online Computer Software Sales in the US industry analysis
There is a wide range of computer software applications currently available and that continue to be launched yearly for both business and personal use, leading the Online Computer Software Sales industry to have numerous vertical markets. The industry has largely benefited from the gradual digital transformation that runs concurrently with macroeconomic growth. However, while many facets of the global economy have suffered during COVID-19 and accompanying economic burdens, online retailers have benefited tremendously from increased digital screen time for work and leisure purposes. So, industry-wide revenue has been increasing at a CAGR of 6.0% over the past five years, including an estimated 2.6% increase in 2023, with revenue expected to total $709.0 billion in 2023. In the same year, profit is projected to increase to 2.1%.Altogether, industry revenue is dependent on several key factors. Historically, revenue growth has expanded tremendously on account of more broadband connections, though growth has slowed from a historical perspective as the number of internet connections reaches saturation; IBISWorld estimates that 93.3% of all US households will have at least one computer in 2023. Revenue is also driven by consumer spending patterns, which rely heavily on savings, investment and general economic sentiment. Although the global macro economy has been suppressed since the beginning of COVID-19, e-commerce platforms have largely benefited from more online orders amid nationwide stay-at-home orders. While the industry has generated greater revenue, profit has tightened on account of fierce price competition among leading enterprises.Revenue growth will continue to outperform the overall economy, though at a tempered rate. More software sales will be executed online as software developers transition to a subscription-based distribution model. Moreover, developing and publishing innovative software products will trigger new and escalated spending from businesses and consumers alike. As a result, industry revenue is expected to increase at a CAGR of 1.9% over the next five years, reaching $778.7 billion in 2028.
Trends and Insights
- Innovation drives online computer software sales growth, particularly the Software as a Service (SaaS) model and private investment. Despite intense competition, costs are managed through automation and subscription models.
- Remote work has increased demand for application software like Microsoft Excel and Adobe Photoshop. System software, especially security software, is highly sought after because of rising cyber threats.
- The industry favors areas with tech enterprises and prominent universities. This proximity allows access to skilled graduates, benefiting this knowledge-intensive sector.
- The industry's competitiveness intensifies because of factors like price, product diversity, quality and brand reputation. A company's pricing strategy relies on its specific expertise and the software type it develops.
Industry Overview
Market size and recent performance (2013-2028)
Industry revenue has grown at a CAGR of 6.0 % over the past five years, to reach an estimated $709.0bn in 2023.
Trends and Insights
Innovation and investment drive growth
- Daily computer usage has been a boon for the computer software industry as more households and businesses adopt digital tools and services, increasing demand for online software sales.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
The industry will chart robust growth
- The computer software market will expand consistently since many households own computers and businesses will continue investing in technological infrastructures.
Biggest companies in the Online Computer Software Sales in the US
| Company | Market Share (%)
2023 | Revenue ($m)
2023 | Profit ($m)
2023 | Profit Margin (%)
2023 |
|---|---|---|---|---|
Microsoft Corporation | 63,077.1 | 27,186.7 | 43.1 | |
Apple Inc. | 12,340.4 | 4,236.8 | 34.3 | |
Adobe Inc. | 11,165.1 | 4,286.8 | 38.4 |
To view the market share and analysis for all 4 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including General business productivity and home use applications , Game software and Cross-industry application software . General business productivity and home use applications is the largest segment of the Online Computer Software Sales in the US.
Trends and Insights
Application software account for the largest share of the industry
- Application software includes general business productivity and home-use applications, game, cross-industry, vertical market applications and others.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- There are no industries to display.
Complementors
- Computer & Packaged Software Wholesaling in the US
- Video Game Software Publishing in the US
International industries
- Global Consumer Electronics Manufacturing
- Software Publishing in Canada
- Software Publishing in Australia
- Computer and Computer Peripheral Retailing in New Zealand
- Software Publishing in the UK
Table of Contents
About this industry
Industry definition
This industry sells and distributes software for local installation and execution to customers via the internet. Companies in this industry may also handle digital rights management for that software.
What's included in this industry?
Selling and distributing software for local installation and execution to customers via the internetHandling digital rights management for softwareSelling software as both a unique download and as a subscriptionCompanies
Microsoft CorporationApple Inc.Adobe Inc.Purchase this report to view all 4 major companies in this industry.
Related Terms
SOFTWARE AS A SERVICE (SAAS)CLOUD COMPUTINGSOFTWAREIndustry Code
NAICS 45411 - Online Computer Software Sales in the US
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
Innovation drives online computer software sales growth, particularly the Software as a Service (SaaS) model and private investment. Despite intense competition, costs are ma...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2013-2022) and forecast (2023-2028)
- Employees, including historical (2013-2022) and forecast (2023-2028)
- Businesses, including historical (2013-2022) and forecast (2023-2028)
- Profit, including historical (2013-2023)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Remote work has increased demand for application software like Microsoft Excel and Adobe Photoshop. System software, especially security software, is highly sought after beca...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2023
- Product innovation level
Charts
- Products & services segmentation in 2023
- Major market segmentation in 2023
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
The industry favors areas with tech enterprises and prominent universities. This proximity allows access to skilled graduates, benefiting this knowledge-intensive sector.
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each state
- Share of population compared to establishments in each region in 2023
Tables
- Number and share of establishments in each state in 2023
- Number and share of revenue each state accounts for in 2023
- Number and share of wages each state accounts for in 2023
- Number and share of employees in each state in 2023
Detailed analysis
- Geographic spread of the industry across North America, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
The industry's competitiveness intensifies because of factors like price, product diversity, quality and brand reputation. A company's pricing strategy relies on its specific...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2018-2023
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Amazon dominates the industry with its exclusively online software operations, unlike Apple and Microsoft, which, despite large software networks, distribute products via vari...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2019 through 2023
- Major companies in the industry, including market share, revenue, profit and profit margin in 2023
- Overview of Microsoft Corporation's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Apple Inc.'s performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Adobe Inc.'s performance by revenue, market share and profit margin from 2017 through 2023
- Overview of revenue, market share and profit margin trend for one additional company
Detailed analysis
- Description and key data for Microsoft Corporation, and factors influencing its performance in the industry
- Description and key data for Apple Inc., and factors influencing its performance in the industry
- Description and key data for Adobe Inc., and factors influencing its performance in the industry
- Description, key data and performance trends for one additional company
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
The industry has minimal regulation. Mostly, rules target the Software Publishing industry (IBISWorld Report 51121). However, legislation on electronic fund transfers and cou...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2013-2028)
- Assistance historical data and forecast (2013-2028)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Rising price competition and low product differentiation are eroding small businesses' profit. Conversely, large corporations profit more because of economies of scale and es...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Investment vs. share of economy
Data tables
- Industry Multiples (2016-2021)
- Industry Tax Structure (2016-2021)
- Income Statement (2016-2021)
- Balance Sheet (2016-2021)
- Liquidity Ratios (2016-2021)
- Coverage Ratios (2016-2021)
- Leverage Ratios (2016-2021)
- Operating Ratios (2016-2021)
- Cash Flow & Debt Service Ratios (2013-2028)
- Revenue per Employee (2013-2028)
- Revenue per Enterprise (2013-2028)
- Employees per Establishment (2013-2028)
- Employees per Enterprise (2013-2028)
- Average Wage (2013-2028)
- Wages/Revenue (2013-2028)
- Establishments per Enterprise (2013-2028)
- IVA/Revenue (2013-2028)
- Imports/Demand (2013-2028)
- Exports/Revenue (2013-2028)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2013-2028)
- IVA (2013-2028)
- Establishments (2013-2028)
- Enterprises (2013-2028)
- Employment (2013-2028)
- Exports (2013-2028)
- Imports (2013-2028)
- Wages (2013-2028)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in the US include:
- US Census Bureau
- US Bureau of Labor Statistics
- US International Trade Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Online Computer Software Sales in the US industry in United States in 2024?
The market size of the Online Computer Software Sales in the US industry in United States is $709.0bn in 2024.
How many businesses are there in the Online Computer Software Sales in the US industry in 2023?
There are 54,141 businesses in the Online Computer Software Sales in the US industry in United States, which has grown at a CAGR of 6.4 % between 2018 and 2023.
Has the Online Computer Software Sales in the US industry in United States grown or declined over the past 5 years?
The market size of the Online Computer Software Sales in the US industry in United States has been growing at a CAGR of 6.0 % between 2018 and 2023.
What is the forecast growth of the Online Computer Software Sales in the US industry in United States over the next 5 years?
Over the next five years, the Online Computer Software Sales in the US industry in United States is expected to grow.
What are the biggest companies in the Online Computer Software Sales in the US market in United States?
The biggest companies operating in the Online Computer Software Sales market in United States are Microsoft Corporation, Apple Inc. and Adobe Inc.
What does the Online Computer Software Sales in the US in United States include?
Selling and distributing software for local installation and execution to customers via the internet and Handling digital rights management for software are part of the Online Computer Software Sales in the US industry.
Which companies have the highest market share in the Online Computer Software Sales in the US in United States?
The company holding the most market share in United States is Microsoft Corporation.
How competitive is the Online Computer Software Sales in the US industry in United States?
The level of competition is high and increasing in the Online Computer Software Sales in the US industry in United States.
