It Vs. Software Company: What'S The Difference

IT vs. Software Company: Key Differences Explained

The world of technology is booming, and the terms “IT” and “software company” are often used interchangeably. While both are essential for any business to thrive in the digital age, they have fundamental differences that set them apart. According to Grand View Research (a US-based Indian and American market research and consulting company), the global software and IT services market size was valued at $474.61 billion in 2022 and is expected to grow at an annual growth rate of 11.9% by 2030.

The market growth is mainly due to small and medium businesses and enterprises that seek to increase their automation processes. Staying on top of trends and technology, these businesses require help from IT and software companies to achieve the goals they have set for the future.

This article will explore the critical distinction between an IT and software company, including roles, functions, and areas of expertise. From their definitions to their specific applications, we’ll delve into the unique ways each field contributes to the digital landscape.

Technology Solutions And Services

What is an IT Company?

An IT (Information Technology) company is a business that provides technology solutions and services to support the management and operations of other companies or organizations. The confusion comes from the term IT. The term is general and means using technology, hardware, and software to achieve digital efficiency. It’s also the reason why people use this term to include software companies as well. However, IT companies use all available technology to send, store, and retrieve information for other organizations.

What is a Software Company?

A software company is an organization that specializes in a single part of the information technology branch and its development, distribution, and maintenance of software products. Software companies create applications, tools, and systems for various purposes, such as productivity, communication, entertainment, education, and more. They use programming languages, frameworks, and tools to design, code, test, and deploy software solutions. Some software companies focus on specific areas of software development, such as mobile apps, web apps, enterprise software, game development, or artificial intelligence.

Critical Differences Between IT and Software Companies

While IT and software companies share some similarities, their fundamental differences set them apart. In terms of technology, IT companies offer a broader range of services, and perhaps the core difference is that software companies build, alter, or maintain business software products. In contrast, IT companies ensure that systems, devices, and software work together synergistically.

It Company Services

IT Company Services

IT companies are the “operators behind the scene,” ensuring that your organization utilizes systems and devices and that all these run smoothly. That includes implementation and checking that devices are working effortlessly and that your organization’s data is secure from breaches. These hardware and software implementations are based on your company’s needs.

There is also a certain level of governance behind the IT services as they create policies to determine what information is available to which user and develop permissions for them to access these documents.
As more companies opt for outsourcing these services, it often doesn’t end with implementing specific software and hardware but maintaining the overall system. IT companies offer their services to specific business needs.

In recent years, many IT companies are also offering consulting services for their clients. They offer the best solution, according to specific business needs, which may have a valuable outcome for business owners, ensuring they are acquainted with the possibilities and challenges.

Software Company Services

Software company services also include consulting into their list of activities, but perhaps in a different manner. If your business has specific requirements, the business analysts may suggest changes or implement other features based on your needs.

As much as IT companies help your organization perform tasks efficiently, software companies can build helpful software that will support your consumers and employees every day. However, when it comes to their core services, they specialize in development, design, programming, testing, and implementing the software into your business system.

When you think of software development is the heart of every software company. However, depending on its type, they may be produced off-the-shelf or custom software, which is essential to remember when choosing a software company. It’s vital when your brand is well-established or needs a custom solution. These custom aspects are also implemented in the design of the front-end part of the software, where the user interface plays a vital role alongside the branding.

The best software is designed to be used quickly and efficiently, which is why design and programming are an essential part of the process. Programmers working on the code ensure that the software serves its intended purpose. That means including the testers who will run the software code and ensure it’s running flawlessly before it’s implemented into your system.

IT vs. Software Company: Which One to Choose for Your Business?

Choosing between IT and software companies depends on your business needs and priorities. If you require comprehensive technology solutions beyond software development, an IT company may best fit you. On the other hand, if you need custom software solutions that meet your unique requirements, a software company may be a better choice.

Business goals

Consider your business goals and objectives when choosing between IT and software companies. Determine what technology solutions you need to achieve those goals and identify which company can provide those solutions.


Consider your budget when choosing between IT and software companies. Each of them has various business models, whether it’s outsourcing or contracting local agencies. Determine how much you can spend on technology solutions and identify which company offers services that fit your needs and budget.


Consider the expertise of the company when choosing between IT and software companies. Determine which company has the skills and knowledge to provide the technology solutions you need.

Industries that Rely on IT or Software Companies

Information Technology

In today’s world, technology has become an integral part of businesses across all industries. Every sector relies on information technology (IT) to streamline operations and improve customer experience, from healthcare to finance, retail to manufacturing. However, there is a significant difference between industries that rely on IT and software companies.

While IT provides the infrastructure and support necessary for businesses to function, software companies create software applications that drive innovation and digital transformation. IT and software play unique and critical roles in various industries.

As mentioned, business expansions fuel the market demand for each service. In recent years the use of cloud platforms has sparked cloud-based solutions and benefits demands. It’s not just reserved for enterprises; most cloud solutions are for small and medium-sized businesses.

Much like enterprise software has reached its all-time high among industries such as government, education, manufacturing, retail, healthcare, and finances. The latter dominated the market with the most significant revenue of more than 25% at the end of 2022. According to the same research conducted by Grand View Research, the human resources segment is about to experience considerable growth in the upcoming period. As a result, integrating and automating corporate solutions will help human resource managers easily navigate tasks, training, payrolls, and recruitment processes.

In the same manner, spurred by increased demand for sophisticated technology by businesses from various industries, the IT and telecom segment will grow rapidly in the following period. Companies constantly seek ways to reach broader markets and communicate with their customers. Additionally, many governments in developing economies support the sector, which means further development and newer software will drive its growth.


In conclusion, IT and software companies have fundamental differences that set them apart. While IT companies offer a broader range of services beyond software development, software companies specialize in developing software solutions that meet the unique needs of their clients.

Choosing between IT and software companies depends on your business needs and priorities. Consider your business goals, budget, and expertise when making your decision. By knowing what your goals are for your business, you can make informed decisions about which services you need to thrive in the digital age.

TNation is a software company providing outsourcing and nearshoring services to businesses of all sizes. We specialize in custom software development, web and mobile app development, software testing, quality assurance, and consulting. Our team works closely with clients to understand their unique business needs and develop tailored solutions that meet their goals and objectives.

Scroll to Top