This report is concerned with software sales in the UK. Software is the collective term for computer programs, which are instructions in code telling a computer what to do in response to specific user inputs.

There are four major areas of software referred to in this report:

• Operating systems. Every generalpurpose computer must have an operating system to run other programs. Operating systems perform basic tasks, such as recognizing input from the keyboard, sending output to the display screen, keeping track of files and directories on the disk, and controlling peripheral devices such as disk drives and printers.

• An application is a program, or group of programs, designed for the end user. Whereas systems software provides behindthescenes coordination and support, applications are frontend resources people use to get things done. Applications software may be customdesigned by or for an individual corporate user, developed and sold as part of a computer hardware system with its own proprietary operating system, or developed and marketed independently for use on one or more of the standard operating systems, also referred to as offtheshelf software.

• Custom software (also known as bespoke software or tailormade software) is specially developed for organizations or users. This contrasts with software packages developed for the mass market, such as commercial offtheshelf (COTS) software, or existing free software. Large companies commonly use custom software for critical functions, including content management, inventory management, customer management, human resource management, or to fill gaps present in existing software packages.

• Middleware is computer software that provides services to software applications beyond those available from the operating system. It mediates between two separate and often already existing programs. Typically, it supports complex, distributed business software applications.

Other terms used in this report include:

• Cloud computing is the ability to use files and applications over the internet instead of hosting, storing, or processing them on locally managed hardware.

• The content, communications, and collaboration software market comprises software products, tools, and hosted services to organise, access, use, and share content. Content management initiatives involve managing and interacting with a multitude of content types, including documents, records, images, forms, and, increasingly, digital media.

• Customer relationship management (CRM) software is a system for managing a company’s interactions with current and future customers. It often organizes, automates and synchronises sales, marketing, customer service, and technical support.

• Digital content creation software enables the creation or modification of digital content, such as animation, graphics, images, or video, as part of the production process before presentation in its final medium.

• Enterprise Content Management (ECM) is the strategies, methods, and tools used to capture, manage, store, preserve, and deliver content and documents related to organisational processes. ECM covers the management of information within the entire scope of an enterprise, whether that information is in the form of a paper document, electronic file, database print stream, or even an email.

• Enterprise resource planning (ERP) is a business management software, usually a suite of integrated applications, that a company can use to collect, store, manage and interpret data from many business activities, including: product planning cost; manufacturing or service delivery; marketing and sales, inventory management; shipping and payment. ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system.

• Enterprise software is purposedesigned computer software used to satisfy the needs of an organization rather than individual users. Services provided by enterprise software are typically businessoriented tools, such as online shopping and online payment processing, interactive product catalogue, automated billing systems, security, enterprise content management, IT service management, customer relationship management, enterprise resource planning, business intelligence, project management, collaboration, human resource management, manufacturing, enterprise application integration, and enterprise forms automation.

• Office suits are a collection of programs for a personal computer that are used to automate common office tasks. The packages usually include: word processing, spreadsheets, presentation, email, and database. These components are sold together and typically interface with each other.

• Project and portfolio management software comprises packages that enable corporate and business users to organize a series of projects into a single portfolio, providing reports based on various project objectives, costs, resources, risks, and other pertinent associations. Project portfolio management software allows the user to review the portfolio that will assist in making key financial and business decisions for projects.

• Software as a Service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the internet.

• Supply chain management software describes applications that enable more efficient management of the supply chain.

All values quoted are at current prices unless otherwise specified.

Reports are researched and written by MBD’s in-house, specialist business-to-business consultants. Research is based on both an analysis of official information and on original, trade research, providing both a quantitative and qualitative view of the market. MBD’s unique range of frequently updated reports provide an integrated body of on-going research, enabling deep understanding of the prevailing trends and the drivers of these trends based on trade opinion.

The following abbreviations have been used in this report:

This report addresses the following key questions:

• How will the market develop over the next five years?

• What will be the key market drivers?

• What industries offer the best prospects?

• Will software as a service continue to impact the total market?

• Which products will benefit most from end-use market trends?