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Software houses: Changing from Product vendors into solution Providers


  • Stefan Heng

    (Deutsche Bank)


Integrating hitherto separate IT systems while keeping within with tight budgetary restrictions is becoming the dominant software trend in this decade. Optimism is currently starting to spread again in software houses. However, there are marked regional differences in potential. Contrary to some forecasts, the US software houses are in the process of consolidating their already dominant position in the global market thanks to their economies of scale, combined with the network effect. Conversely, the only chance for most of their typically small European competitors to score points is in certain niches of the market.

Suggested Citation

  • Stefan Heng, 2005. "Software houses: Changing from Product vendors into solution Providers," Industrial Organization 0504023, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpio:0504023
    Note: Type of Document - pdf; pages: 8. E-Conomics No.50, also available under: PROD/PROD0000000000186720.pdf

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    More about this item


    system software; application software; CRM; ERP; SCM; Web services;

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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