The software development industry is as varied as the companies that use its products. A search in Hoover's database yields more than 400 midsized, publicly traded companies in the business of developing software. They range from the nearly $2-billion Adobe Systems Inc., a publishing systems stalwart, to the $100-million security software vendor Webroot Software Inc. in Boulder, Colo.

Yet whether a vendor creates niche software for centralized scheduling applications or an integrated suite of enterprise resource planning (ERP) software, a common thread is the competitive and rapidly evolving nature of the industry. AMR Research analyst Eric Klein says that the overall state of today's software industry is healthy. In particular the markets for human capital management, ERP, customer relationship management (CRM) and supply chain management applications are growing at the double-digit pace of 12% to 15% annually. Vendors, say analysts, are shifting from selling software to providing services. The Internet and the rising use of Software as a Service (SaaS) are identified as central to the shift in the way software companies do business.