oftware business as their main activity, though they may have units with another business orientation. In the NACE categorization used by OECD and EITO, these companies are categorized mostly under category 72.2. Companies with other categorizations often have software-oriented business units or their operations include software development, sales and consulting related to their products. These companies are placed on the right hand side in the figure as the secondary software industry. The official NACE-based statistics on software production provides only a partial picture of the software sales: the statistics reflects the total sales of the 72.2 category software companies (including also nonsoftware sales), while soft- ware sales of the software business units in the secondary software industry are excluded. Meanwhile, according to former EU Commissar Erkki Liikanen, in the EU, 70% of software was developed by the vertical industries, such as car manu- facturers, while only 30% was produced by primary software industry enterprises. This means that the software market statistics represent only the revenue of the primary SWI enterprises while the total volume of a vertical software industry includes also the software development activity of the secondary SWI enterprises, which often exceeds the primary software industry volume. Software Software Enterprises Business Unit in Primary Spin-off Software products Software Industry Software development (NACE 72.2) Outsourcing ASP services Software development Services Software products Software Vertical Industry Enterprises ASP services Primary software industry Secondary software industry Fig. 1 Interaction between enterprises in the primary software industry and other industries P. Tyrväinen Three Perspectives Needed for Success of Vertical Software New primary software companies may be born both from academic environments and technology developers, as well as from the business units of secondary software enterprises (Chesbrough et al. 2002; Giarratana 2004; Romijn