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Do you own these 3 sticky software shares?

Credit: Printed Circuit Corporation.

Australia’s technology space is tiny in comparison to global markets. In fact, if Apple Inc shares were listed on the ASX, it’d account for more than half the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

But despite our small size, a number of promising ASX-listed software businesses exist. Software is arguably the best form of technology.

Indeed, software businesses are low cost, scalable and sales are extremely sticky. Think of the software you use at work, school or university, it’s easy to add another user to the network but it wouldn’t be easy to re-install and train every staff member on another system.

Here are three ASX software businesses worthy of a spot on your watchlist.

  1. XERO FPO NZX (ASX: XRO)

Xero is the New Zealand-based cloud accounting software provider taking on the world. If you think about the value of the data that Xero collects on small businesses and how difficult it would be to overhaul all your accounting systems, you’ll start to see how Xero has a very promising future.

  1. Bulletproof Group Ltd (ASX: BPF)

Bulletproof Group is a small business offering software and services. Bulletproof helps businesses go from standalone technology platforms to a more modern and versatile cloud-based service. It works on leading cloud operators like Amazon’s AWS and VMware.

  1. Altium Limited (ASX: ALU)

Altium creates software for electronic product developers who create devices with printed circuit boards (PCBs). PCBs are the little green boards inside almost every electronic device. Altium’s future appears very bright given the backdrop of the increasing interconnectedness of ‘smart’ devices.

Foolish takeaway

Software businesses can be great investments over the long-term. However, they are not without their risks, so be sure to do your own research before getting swept up in their potential.

Altium is a great stock but The Motley Fool's expert analysts recently hand-picked another ASX share as their best dividend share idea for 2016.

Indeed, our resident dividend experts named their Top Dividend Share for 2016. Not only are the shares dirt cheap, the company is growing and trading on a 5.6% fully franked dividend yield. Simply click here to gain access to this comprehensive FREE investment report, including the name of this fast growing ASX dividend share. No credit card required!

Motley Fool Contributor Owen Raszkiewicz owns shares of Xero and Bulletproof. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Apple. The Motley Fool Australia owns shares of Altium and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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