As we have seen, orienting a business towards products or services will generate very different business dynamics although both approaches can generate profitable business models. Nonetheless, it will be very difficult to keep pure-product companies alive and the barriers to entry will be substantial.
The "Software 500" survey of "Software Magazine" (www.softwaremag.com), which produces an annual ranking of the top 500 commercial software companies by revenue, shows that both types of company discussed here can be found among the most profitable companies.
However, of the top twenty, only four have a marked product focus with services representing less than 30% of their total business: Microsoft Corporation, Oracle, SAP and Symantec, which offer leading products in their sectors to corporate customers and mass markets (desktop operating systems, databases, ERP and security, respectively).
Two companies, Lockheed Martin Corporation and EMC Corporation, have a 50% balance between products and services. Of the remaining companies, ten state that their primary business sector is integration, consulting, and outsourcing services, while the rest, although dedicated to the development of specific products, derive their income primarily from the provision of related services.
The following figure illustrates the current positioning of these and other software companies by approach (application, infrastructure, services) and the type of customers they target (business or domestic consumers).