What’s the Difference Between IT and Software Companies

What’s the Difference Between IT and Software Companies

Yes, IT and software companies are not the same, despite sounding very similar. These two types of companies have different functions and serve different purposes. 

If you’re not sure how to distinguish between IT and software firms – worry not! As the best custom software developer in California, Emphasoft company knows the difference and we are ready to share the knowledge with you. 

What does an IT company do?

IT companies traditionally manage the IT infrastructure on companies’ behalf to ensure everything runs smoothly and all IT services required for internal and external work are available at all times. 

Essentially, IT companies do the “behind the scenes” work. They look after servers and take care of all the devices in general, ensure data security, investigate what can be further automated to optimise the processes and run upgrades to the environment. For highly regulated industries, IT companies would also perform regular checks, run reports, and ensure that the business is fully compliant. 

Depending on their agreement with the client, an IT company can focus on smaller maintenance jobs, come up with a whole new IT strategy and implement it, or do both. 

Here are some examples of the tasks that many IT companies take care of: 

  • Ensuring software and hardware devices are working properly.
  • Providing technical support to business users.
  • Running random performance checks.
  • Troubleshooting bugs and errors. 
  • Implementing new data security ideas and measures. 
  • Creating and maintaining company-wide IT policies.  
  • Building data backup systems. 

What does a software company do?

Software companies build products for clients. Unlike IT companies, they don’t work with the existing market solutions but create unique systems from scratch or customise the current software. 

Software development and project management are the key expertise of software companies, that’s why they usually maintain a powerful team of developers with vast experience in web and mobile development, a profound understanding of at least one programming language, and a deep understanding of tools that optimise the software creation process. 

Software companies would typically engaged in the following tasks and projects: 

  • Full-cycle custom solution development.  
  • MVP development and prototyping.
  • Publishing software, such as mobile apps in app stores. 
  • IT consulting for startups.  
  • Legacy software modernisation for enterprises. 
  • UX/UI design development and update. 
  • Maintenance of and technical support for the built solutions. 
  • Technical staff augmentation and outsourcing. 

Software companies Management:

Software companies have managed to build their own sub-industry within the IT world. Thanks to globalization, it’s become easier than ever to collaborate with software companies regardless of their location. This has led to certain regions turning into software development outsourcing hubs and boosting local economies by attracting thousands of clients from all over the world. 

And even if we’re not talking about offshore outsourcing, partnering with a software development company as an alternative to building an internal team has become highly lucrative. The entire process of hiring and maintaining IT talent has become very difficult and expensive; pricing many startups out of the chance to get experienced professionals. 

The most successful candidates are always on the lookout for the next big career opportunity; so the cost of onboarding and keeping the team is constantly rising. Reaching out to a software company for a service, such as a website update or an MVP development, in turn; has become easier and more affordable, allowing non-tech companies to achieve the desired results faster; with better quality, and also cheaper. 

The key differences between an IT and a software company

As we’ve established, IT companies and software companies have different roles but are still part of the same industry. 

Perhaps the biggest difference between the two business models is that software companies focus on the digital side of information technology. You will rarely (if ever) find a software company that offers hardware maintenance services. 

So while every software company is an IT company by its nature; because it has to do with information technology, not every IT company is a software company. 

The tasks that IT companies are assigned mostly fall into one of three categories:

  1. Function 
  2. Fundament 
  3. Administration 

And for the software company, the key task categories are:

  1. Development and programming 
  2. Design 
  3. Automation 

As you see, IT companies are busy with providing the base infrastructure that ensures software solutions can function properly and be utilised by users. And software companies build on top of that base by creating solutions; and systems that further enhance the company’s performance and facilitate the achievement of their business goals.  

The common ground between IT and software companies

We talked a lot about the differences between IT and software companies. And while it’s true that they provide very different services to their customers, they overlap too. 

Firstly, just like many other things in the tech world, the terms “IT company”; and “Software company” will have different meanings depending on who’s talking about it. There are industry standards and generally understood terms; but some still insist that an IT company is the same as a software development company. 

And the functions of the two company types are often mixed too. As an example, Emphasoft is a software development company that offers the service of legacy solutions’ modernisation. Some claim that doing work with legacy tools is the job of an IT company. Or, while MVP development is often outsourced to software companies, it may as well be created by an IT company; especially if we are talking about backend solutions that the company’s customers will not be interacting with. 

So, as you see, the principles and differences that we’ve shared just now are not set in stone. Technologies are evolving, and so is the tech world in general; so use the information we covered today as the basis but be prepared to see a different take on it in the real world.  


And despite all the differences, both IT and software companies are equally important for enterprises. One can’t ensure proper functioning without a solid base that an IT company provides. Just like the business will hardly stay successful in the long-term if they don’t use top-notch solutions built by software companies. 

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