Software Market On The Upswing, Studies Show



Two major studies examining different phenomena--venture capital and high-tech employment--reached similar conclusions last week: The software industry is solid, if not booming.

The PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree Survey found that 198 software-industry companies raised $1.1 billion in the first quarter of 2005, representing the largest single industry category. Total VC investments for the quarter were $4.6 billion, and, although that figure was down 8% from a year ago, it was in line with historical norms.

"I think we're in a stable environment, which is a good thing after the roller-coaster ride of 1999 through 2003," Tom Crotty, general partner of Battery Ventures, said in a conference call reporting the results.

An American Electronics Association study, which looked at employment state by state, said slightly more than 30,000 jobs were added in the software-services industry in 2004. However, high-tech manufacturing lost 32,000 jobs between 2003 and 2004, with a net industry loss of 25,000 high-tech jobs from total employment of 5.6 million.

"For the first time since 2000, both software services and engineering and tech services added jobs," AEA president and CEO William T. Archey said in a statement. "Each of these tech sectors added over 30,000 net new jobs to the economy in 2004."

--With Steven Marlin

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