Under a cloud: Industry revenue plummets as developers sell directly to end users

The Online Computer Software Sales industry has struggled immensely over the past five years due to its suppliers engaging directly with their end users via online distribution avenues. Despite expanding the industry's potential market size, the rising number of internet connections over the period has facilitated a crippling degree of disruption from software publishers. The digital and cloud-based nature of their products and services has enabled software developers to retail their products to households and businesses directly over the internet via digital downloads or subscription-based distribution models. As a result, industry revenue is expected to decline at an annualised 21.5% over the five years through 2017-18, to total $37.5 million. This includes an anticipated fall of 23.5%...read more.

Industry Statistics & Market Size
Revenue
$38m
Annual Growth 13-18
-21.5%
Forecast Growth 18-23
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Profit
x.x%lock
Employment
138
Businesses
25
Market Share of Companies

Industry Threats & Opportunities

  • Consumers are increasingly opting to purchase their software directly from developers
  • The advent of cloud computing has exacerbated the industry's rate of decline
  • The increasing availability of free software has been detrimental to the industry

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    Industry Report - Starting a New Business Chapter

    The Online Computer Software Sales industry exhibits moderate barriers to entry. These are largely governed by the industry’s high market share concentration and the rising degree of competition from software developers. Over 70% of industry revenue is accounted for by the online sales of the top four players. New entrants tend to find it difficult to establish a profitable customer base given the reputation of operators such as Wesfarmers and JB Hi-Fi. As a result, new entrants usually have to invest substantially in advertising, particularly via internet-based channels such as search engine marketing and social media, to market their brand...purchase to read more.

    Additional Insights for the Online Computer Software Sales Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Online Computer Software Sales Industry are

  • Ability to access niche markets
  • Ensuring pricing structure is appropriate
  • Receiving the benefit of word of mouth recommendations

    • IBISWorld analysts also discuss how external factors such as Real household discretionary income and Consumer sentiment index in the Online Computer Software Sales industry impact industry performance..

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    What's in this report

    Industry Products

    What is the Online Computer Software Sales Industry?

    The Online Computer Software Sales industry sells and distributes software for local installation and execution to customers via the internet. Industry companies service households and small businesses that purchase software packages online. The industry excludes software licensing for large companies, video game sales and smartphone app sales.

    Industry Products
  • Office software
  • Photo editing software
  • Accounting software
  • Other software
  • Antivirus software
    • Industry Activities
  • Online software sales
  • Online software downloads (for licensed products)
    • Table of Contents

    About this Industry

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources

    Industry at a Glance

    Industry Statistics Snapshot
    Industry Structure
    Executive Summary

    Industry Performance

    Executive Summary
    Key External Drivers
  • Real household discretionary income
  • Consumer sentiment index
  • Demand from computer and software retailing
  • Internet connections

    • Current Performance
  • Industry disruption
  • Changing business environment
  • Industry structure
  • Chart: Revenue Growth

    • Industry Outlook
  • Cloud proliferation
  • Industry structure
  • Table: Online Computer Software Sales Industry Revenue Outlook

    • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Online Computer Software Sales Industry Lifecycle vs The Economy

    • Products & Markets

    Supply Chains
    Key Buying Industries
  • Consumers

    • Key Selling Industries
  • Computer and Electronic Office Equipment Manufacturing
  • Computer and Software Retailing
  • Internet Service Providers
  • Software Publishing

    • Products & Services
  • Office software
  • Antivirus software
  • Other software
  • Photo editing software
  • Accounting software
  • Chart: Online Computer Software Sales Industry Products and Services Segmentation

    • Demand Determinants
    Major Markets
  • People aged 35 to 54
  • People aged 55 and over
  • Small businesses
  • People aged 15 to 34
  • Chart: Major Market Segmentation for the Online Computer Software Sales Industry

    • International Trade
    Business Locations
    Chart: Business Locations by State

    Competitive Landscape

    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Online Computer Software Sales

    • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Online Computer Software Sales Industry

    • Industry Globalization

    Major Companies

    Wesfarmers Limited, JB Hi-Fi Limited,
  • Table: Wesfarmers Limited - financial performance
  • Table: JB Hi-Fi Limited - financial performance

    • Operating Conditions

    Capital Intensity
  • Chart: Level of Capital Intensity for the Online Computer Software Sales Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

    • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

    • Regulation & Policy
    Industry Assistance

    Key Statistics

    Table: Industry Data for the Online Computer Software Sales Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

    • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data

    Jargon & Glossary

    Cloud Computing
  • A computing model where users can access services via a virtualised environment, constructed using shared physical resources connected over a public network such as the internet.
    • Operating System
  • A computer software package that controls the management of its hardware and core system operations such as file management.
    • Software As A Service (Saas)
  • Refers to the sale of software on a subscription basis with related customer support, rather than the sale of standalone products.
    • What Our Customers Say
    Why buy this report?

    IBISWorld’s Online Computer Software Sales market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Online Computer Software Sales:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Online Computer Software Sales market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Online Computer Software Sales, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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