Hello everyone and welcome to our course on commercial open source software startups and

how to spin off such a startup from university.

We are at the beginning of the lectures for this course.

The course has three main parts of which this one is about the software industry.

The first lecture as you can see is exactly about the software industry followed by a

lecture on software products, then on software vendors and finally on another topic specifically

the business models underlying software vendors and related companies.

My name is Dirk Riele.

I'm your host and the creator of this course.

So in this first session of about an hour we will clarify what software, what the software

industry is, look at its history which is intriguing and then at the main players that

populate this industry.

Then we will look at software products as the main creation or main creation of this

industry including services to operate products and we will look at two core or one core strategy

software platforms and the necessary support they need by way of software ecosystems.

So what is software?

I'm pretty sure you have an idea in particular most of you will have an engineering background

so you're probably thinking about software from a technical perspective.

It's instructions to make a computer do something, it can be in textual written form, then it's

source code, can be compiled, then it's binary bits instructing a computer what to do and

that is important because these properties will be relevant later on.

Software is built from components.

You put components together to assemble larger and ever larger programs and services and

so forth.

Next to this engineering perspective or technical definition software is also an economic entity

and specifically we call it a digital good and as a good it can be bought and sold which

is a big part of the foundation of the software industry.

I'm not sure I need to tell you much about the significance of software, it's pretty

much everywhere today.

It's not necessarily visible, it's inside physical devices, it's in the infotainment

stack that software that operates the center console of your car or it's a mobile phone

so it operates factories, it operates medical devices, all of these.

So software is everywhere in the physical world, an integral part of how the physical

world operates.

Software is its own thing in that it runs on computers and you run it for its own purpose.

So you run spreadsheets to do calculations and they're not tied to a physical device

except that you run it on your laptop or some workstation.

And also increasingly software is operated as a service for you so you don't even hold

that software in your hand any longer, someone else does that for you and lets you access

it through the internet.

So that would be all kinds of services from email, through social media, through games

and as such it is economically valuable because people pay for it, pay significant amounts

of money for it.

So increasingly are we not only using that, we are living in a world dominated by software

where everything would come to a screeching halt if the software wouldn't do what it's

supposed to do.

And so comes in the business perspective.

Businesses, some type of business called vendors, we will see that, sell products.

So software can be a product.

First a product is a man-made artifact.