Path Creation in the Software Industry—The Case of Software AG

The article analyzes the development of the German software company Software Aktiengesellschaft (AG), which was among the few European companies that succeeded in the US market already in the 1970s. Utilizing the concept of path creation, it examines how early success impacted the development of the company. It shows that at least two paths in the development, the focus on the Adaptable Database System (Adabas) product ecosystem and the underlying technology, as well as the strong internationalization, relate to the early success and influenced the further evolution of it. The analyses reveal that they played an important role in how the company reacted on to the rise of relational databases and the vertical disintegration of the computer industry. As a consequence of the late adoption, of them they company got into troubles and needed to adjust their profile and orientation during the 1990s and early 2000s, which is analyzed in the final part of the article.