The Software Industry in the 1950s

The software industry began in the late 1950s when the use of computers for business applications expanded rapidly creating a huge demand for people with programming experience.  A number of people who had learned their programming skills working for computer manufacturers or for the large companies and government agencies that were the first computer users saw this as an opportunity to start their own companies and sell their services under contract.  

The first such company, Computer Usage Corporation (CUC), was founded in 1955 by Elmer Kubie and John W. Sheldon, two former IBM employees.  The company was founded with $40,000 in start-up capital which supported a staff of five in addition to the two founders.  Its first project was a program written for California Research Corporation to simulate the flow of oil.  CUC became a public company in 1960 and by 1967 had a staff of over 700 people in 12 offices around the U.S. and revenues over $13 million.  Unfortunately, it suffered financial losses in the late 1970s and eventually went bankrupt in 1986.

In 1959, seven Univac programmers founded Applied Data Research (ADR) to  market their programming skills to computer manufacturers such as Sperry Rand and Honeywell to develop systems software.  ADR went public in 1965 and, in the late 1960s, became one of the first companies to successfully sell software products.  It continued to be one of the largest U.S. software product companies until it was acquired by  Ameritech for $215 million in 1986.

Fletcher Jones and Roy Nutt, who had gained their computer experience in the aerospace industry, founded Computer Sciences Corporation (CSC) in 1959 with $100 and a contract from Honeywell to develop a business-language compiler called FACT.  By 1963, CSC was the largest software company with revenues close to $4 million.  CSC continues to thrive today as one of the world largest information technology services firms with more than $10.2 billion in revenues.

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