What is Software Sector?
Software spans enterprise SaaS (Salesforce, ServiceNow, Workday), infrastructure (Microsoft Azure, Snowflake, MongoDB), security (CrowdStrike, Palo Alto, Zscaler), and developer tools (GitHub, GitLab, Atlassian). Indian IT services (TCS, Infosys, Wipro, HCL) are a related category โ services rather than products, but software-adjacent.
Why it matters for investors
Software companies typically have high gross margins (70-85%), recurring revenue, and scalability โ making them favorites of growth investors. The shift to subscription/SaaS models has produced predictable cash flows. AI is now reshaping software economics โ both as opportunity (new products) and threat (commoditization).