A program or group of programs designed for end users. Software can be divided into two general classes: systems software and applications software. Systems software consists of low-level programs that interact with the computer at a very basic level. This includes operating systems, compilers, and utilities for managing computer resources. In contrast, applications software (also called end-user programs) includes database programs, word processors, and spreadsheets. Figuratively speaking, applications software sits on top of systems software because it is unable to run without the operating system and system utilities.

Application software can also be sub-divided into several classes and sub-classes. Major classes include scientific software, business software, and leisure software (games and entertainment). Business software sub-classes include productivity software, accounting software, database software, and eCommerce software, and can be further broken down into numerous horizontal and vertical market applications.

Software applications can also vary according to their specific purpose. Packaged software (also known as ‘shrink wrapped’ software) is developed to target a specific need or market and is intended to satisfy a broad base of customers. Custom software is designed to fulfill a unique requirement and is normally intended to satisfy only that requirement. Custom software development companies often specialize in a particular type of software, such as warehouse management or in a broader area such as Internet Software.