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Local Software Industry Still Losing Jobs, Companies

Posted on: Wednesday, 2 November 2005, 18:00 CST

BOSTON (AP) - Massachusetts' computer software industry has posted a fifth straight year of declines in jobs and number of businesses, a trend driven recently by mergers and outsourcing.

A survey being mailed this week by the Massachusetts Technology Leadership Council lists 2,655 companies selling software and related products in Massachusetts this year, down 126 companies, or 4.5 percent, from a year ago.

Those companies employed 118,976 workers, a reduction of 5,831 workers, or 4.7 percent.

Joyce L. Plotkin, the council's president, said part of the decline in the number of companies can be attributed to tighter criteria the council used in its survey this year.

Plotkin said Massachusetts continues to add software start-ups, even as more established mid-size firms are acquired by bigger companies such as Microsoft Corp., IBM Corp., and Computer Associates International Inc.

"It's relatively flat," Plotkin said, noting that the software industry today is roughly the size it was before technology markets declined about five years ago. "But we believe we're at a sustainable level of employment, and we believe software will continue to be a factor in the economy of this state."

She said structural changes are reshaping the software industry as customers cut back on vendors, companies merge and markets globalize. Meanwhile, more customers are buying software applications "on demand" from third parties, rather than licensing software and putting it on their own servers.

Despite the declines in the state's software companies and jobs, the survey showed growth in the number of software firms that market both a product and a service, and in the number of companies that distribute their products and services outside the United States.

Source: Providence Journal

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