DoD ESI Home

Historical Timeline

Historical timeline of the evolution of the software industry from the 1950s, when software was bundled with the First Commercially available mainframe computers, through emergence of the commercial software industry and its Fee-Based Applications Software Deployment with On-Premises Application Licensing, to Off-Premises Applications Services Subscription and SaaS Ecosystems in 2005

In the early years of the commercial computer industry, applications were bundled with computer hardware, which over time became too expensive for vendors. The first software firms started in 1960 to support universities and businesses seeking to perform specific computing tasks. The software industry began to expand rapidly with the introduction of personal computers in the mid 1970s. This includes businesses involved in the development, delivery and maintenance of computer software, as well as consulting services for product selection, implementation and training. The expertise and resources required to deploy and maintain increasingly sophisticated business software applications created opportunities for alternative forms of software delivery models. While service bureaus have provided some technology-based services such as for payroll processing since the 1960s, the concept of Application Service Providers (ASPs) emerged as a viable alternative to on-premise software licensing in the late 1990s. Among ASP business models—SaaS and managed hosting services—the market for SaaS solutions has gained far more momentum in the 21st century for reasons described under Business Model.