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Ever since commercial transactions have existed, humankind has been looking for ways to simplify processes, reduce the risk of errors and increase revenue. 

These were the primary goals motivating the creation of the first business software products. The evolution of business software has gone through several stages already – from custom developments for the needs of a specific company to commercial off-the-shelf applications and software as a service (SaaS) products.

Today, business management technologies have become indispensable to operations, and real-time connectivity is no longer a novelty but a requirement. We’re celebrating the anniversary of the World Wide Web, brought to life on April 30th 1993, so let's take a walk down memory lane and see the strides we have made in the area of business software, assess where we are today, and where we’re headed. 

Business Software: Where We Are Now

Small business IT spending has been consistently on the rise for numerous years. Software expenditure went up from 148 billion dollars in 2011 to 218 billion dollars in 2017 – a CAGR of seven percent. Ninety-two percent of small companies are using one or more cloud-based solutions. These solutions have reduced company workload by at least 42 percent, recent stats suggest.

Enterprise software expenditure is anticipated to reach 462 billion dollars globally in 2020. The ERP market alone is anticipated to garner 41.69 billion dollars, growing at a CAGR of 7.2 percent.

We’ve come a long way since those humble beginnings. Developers put a lot of work into creating the affordable, customizable and flexible business management solutions that businesses rely on daily.

Business Software: A Quick Historical Walkthrough 

The first mechanical computer came into the world in 1822, but it wasn’t until 1911 that IBM was founded. The first digital computer was born in 1939. The Atanasoff-Berry computer was the pioneer created to feature some of the key characteristics modern computers have today.

This development enabled the conceptualization of software products, a process that was initialized in 1943. Colossus, the first programmable digital computer, was used in attempts to crack German codes during World War II. By 1955, software development became much more common rather than exclusive to the military realm. Computer Usage Company (CUC) was the first one to start selling software separately from computer hardware.

By 1957, computers had become essential to the operations of the business world. ADP became the first company to use mainframe computers for payroll processing in corporations. 

The evolution was sped up even further in 1972 when SAP was founded.

Today, SAP is one of the biggest enterprise software companies in the world. Back then, it featured five former IBM employees who decided to set up their own business in Germany. Systems Analysis and Software Development (Systemanalyse und Programmentwicklung) or SAP was set up for the sole purpose of creating enterprise software using real-time data. 

ERP (or enterprise resource planning) saw its humble origin in that work. The term itself, however, wasn’t coined until 1990. The original concept of material requirement planning (MRP) came into existence in the 1960s and with time, ERP emerged to extend MRP functionality and incorporate all of a company’s back office needs.

The Evolution of Business Technology Continues 

Based on solid foundations, the ERP world could now take software development a step further.

Technological advances continued speeding up the evolution beyond the 1990s and into today’s world.

In 1993, the first web browser became a reality. Mosaic popularized the world wide web and gave birth to a digital revolution. In 2007, Apple launched the first iPhone to make mobile computing readily accessible on the go. The same year marked the rise of big data. 

Statistics show that by 2007, 94 percent of data storage became digital. The sheer volume of data was so humongous that regular software solutions became incapable of processing all the information. New software had to be developed for the purpose of mining data warehouses for business intelligence.

In 2010, tablet computing became a thing and made software usage on the go even more pronounced. By 2012, wearable tech was no longer science fiction. Fitbit was launched back in 2007, Google Glass took the concept a step further in 2013. While the experiment wasn’t the most successful one, it demonstrated the huge potential of customizable, wearable, cloud-based tech.

As these innovations came in rapid succession, many former developments became obsolete. Floppy drives and DVDs became quickly replaced by cloud-based storage solutions. Today, software can be acquired directly online and there’s no need for a physical carrier. This cloud-based mode of operation has reduced the cost of ERP product acquisition even further, making business software readily available to even the smallest companies out there.

The Future of Business Software

In 64 years, business software has undergone a massive evolution. We’ve made leaps and bounds since those early efforts to crack German war code.

The journey isn’t over yet.

The future of business software is marked by a number of new developments that are just starting to make an impact.

We live in a world where access to information “right here, right now” is no longer just a desired feature, but a requirement to thrive in business. As a result, the enterprise SaaS market is currently generating 20 billion dollars in quarterly revenues. Business research shows that over 60 percent of corporate end users prefer cloud over on-premise software solutions and logistics are continuously making the shift towards the SaaS model. With products like SAP Analytics Cloud, decision-making will never be the same, and this fact will be one of the determinants for the future of business software. 

Universal connectivity will push IoT forward, enabling 24/7 access to information and providing the conditions needed for massive improvements in numerous sectors (ranging from manufacturing to transportation and healthcare provision).

Artificial intelligence (AI) is also already impacting data analysis and the creation of predictive models. The volume and velocity of data generation will continue increasing. Hence, we’ll need some assistance from a powerful “cyber brain” that’s capable of processing, sorting and organizing data in a way deemed impossible before. 

5G networks, blockchain technologies, automation and possibilities for end-user custom software creation will speed up service provision, allow for unique applications and reduce the cost of business software even further in the decades to come. 

We live in an exciting world and we’ve gone a long way since the early days of business software. Companies like SAP have been driving growth and transformation, making corporate solutions readily accessible and much more tailored to the needs of each corporate client. Exciting new developments are to continue occurring and innovative approaches will show us that big data processing and the ultimate user experience still have a long way to go. If you want a first-row seat to not only witness but be a part of the innovation, contact us for information on how we can take your business to the next level of digital transformation.

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