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While the U.S. economy may have been slow, the software industry in 1990 grew at an impressive rate, especially in sales outside the U.S.
The Top 50 independent suppliers in Software Magazine's annual survey reported combined revenues for worldwide packaged software sales of just under $10.7 billion for calendar year 1990. This represents a 29% increase over 1989, in which the Top 50 ranking companies collectively achieved $8.3 billion.
For independent software vendors, topping $10 billion marked a banner year. Collectively, for the first time in the software industry, they outperformed IBM. Big Blue, posting $10 billion in software revenues for 1990, no longer towers over the combined Top 50. (Editor's note: IBM's calendar and fiscal years are the same.) However, IBM still managed strong growth in both U.S. and non-U.S. software operations, with a combined increase of 18.1%. IBM's 1990 software earnings comprise approximately 14% of the firm's total 1990 worldwide revenue of $69.0 billion.
Digital Equipment's percentage of software revenues to total corporate revenues nearly matches IBM's. David Stone, VP of Digital's New Software Group, informed Software Magazine that software sales in fiscal 1990, which ended July 31, accounted for 15% of total revenues, or nearly $2 billion. And, Stone said, "the potential is there to be 30% (of sales)."
1990 U.S. packaged software sales rose moderately to $5.8 billion, up 7.8% from the $5.4 billion reported by last year's combined Top 50. Despite an increasing growth rate from year to year, U.S. sales account for only 54% of the Top 50's worldwide sales.
The expanding international market continues to afford increasing revenue opportunities. At the current growth rate of 69%, overseas sales may soon dwarf domestic sales. This aggressive sales growth earned the combined Top 50 approximately $4.9 billion from non-U.S. sales, compared to $2.9 billion reported last year.
(Editor's note: Adjusted for companies based outside the U.S. that have moved into or out of the Top 50, non-U.S. software sales increased 54% from last year's figures.)
Software companies that expanded their overseas sales networks and foreign business partnerships are reaping the rewards. U.S.-based software firms, such as Ashton-Tate Corp., Cincom Systems, Inc., and Canadian-based Cognos Inc., generated more of their total 1990 software revenues from their international operations than from...