The world software industry and associated markets are estimated to be worth 1.1 trillion US Dollars, ninety percent of the world's exports in software is from the United States and Europe evidence would also suggest that outside the United States and Europe, the new and emerging countries within the software industry are Brazil, Russia, India and China (known as the BRIC Nations). The Software industry greatly affects the economic systems of these countries. Although figures vary these emerging markets account currently for around 6 per cent of global export markets. While “lower cost labour” is the most commonly cited reason for offshoring, intense global competition in an environment of slower growth and low inflation demands constant vigilance over costs. Due to low costs and high quality, using offshore resources in selected countries seems to make good economic sense. Beyond the cost incentive, global sourcing provides several other practical benefits including: the ability of multinational organisations to efficiently stage all year round operations; the opportunity to customize products and services to meet local needs; and the means of geographically deploying workers and facilities to succeed in globally dispersed, highly competitive markets. This paper examines some of the issues within these emerging countries within the wider global software industry.
Tipping in Two Sided Software Markets: An Investigation of Asymmetric Cost Differences