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Proprietary software an anomaly

By   |  April 23, 2007

Proprietary software is an anomaly in the market.

This is according to Rishab Ayer Ghosh, a free software researcher at the University of Maastricht in the Netherlands, who was speaking at the Digital Freedom Expo in Cape Town on Friday.

Very few vendors make their money by selling packaged proprietary software and just over 15 percent of software spend is on packaged software, said Ghosh.

Ghosh, who has had a hand in compiling a number of important free and open source research projects over the last few years, said that contrary to what most people believed it was just a handful of companies, such as Microsoft, that made money by selling pre-packaged software. The majority of software companies make their money by custom building software, maintaining software or integration work, he said.

Also, said Ghosh, very few software programmers worked developing pre-packaged software.

According to the study, just 7 percent of software programmers in the US worked for pre-packaged software companies. This is in comparison to the 30 percent of programmers that worked developing custom software, in integration and support. The majority of software programmers, at 60 percent, however, worked in the “user sector” creating software in-house for government, manufacturing, retail and similar sectors.

As far as software spending is concerned, Ghosh said that just 16 percent of the money spent on software in the US is spent on packaged software. In comparison between 40 and 50 percent of sofware spend is on custom software commissioning.

“What we found is that selling pre-packaged software is a fairly small portion of the market. Nobody, or very few, really make money by selling software. Most make money be selling their time.”

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