NAICS 511210 (Software Publishers) - The
NAICS 511210 just pulled off a quiet coup. In FY2024, Software Publishers overtook "Other Computer Related Services" (541519) to become the top federal IT NAICS code by dollar volume. If you sell commercial software, SaaS platforms, or enterprise licenses to the government, this is your market—and it's growing 40%+ year-over-year.
TL;DR
- NAICS 511210 covers commercial software licensing, SaaS, and enterprise platforms—distinct from custom development.
- $7.26B awarded in FY2024, up from $3.16B in FY2021—a 130% increase in three years.
- Now #1 in IT spending through GSA Schedules, overtaking 541519 for the first time.
- Top buyers: DoD ($2.8B), HHS ($1.1B), and VA ($890M) lead procurement.
- Small business friendly: $38.5M size standard with growing set-aside opportunities.
- CLEATUS tracks all 511210 opportunities in real-time, surfaces pricing patterns, and identifies the best capture targets for software publishers.
Live NAICS 511210 Market Data
See real-time contract opportunities, winning companies, and pricing trends
View Market Intelligence →
NAICS 511210: Why Software Publishers Are Dominating Federal IT
The federal government's shift from custom-built systems to commercial off-the-shelf (COTS) software and SaaS platforms has fundamentally changed federal IT procurement. NAICS 511210 captures this transformation—and the numbers tell the story.
The Growth Trajectory
| Fiscal Year | GSA Schedule Awards | YoY Growth | Market Position |
|---|---|---|---|
| FY2021 | $3.16B | — | #3 IT NAICS |
| FY2022 | $3.50B | +11% | #3 IT NAICS |
| FY2023 | $4.90B | +40% | #2 IT NAICS |
| FY2024 | $7.26B | +48% | #1 IT NAICS 🏆 |
| FY2025 (YTD) | $1.66B | On pace | Still #1 |
What's driving this? Three converging trends:
- Cloud-first mandates: Federal agencies are required to evaluate cloud/SaaS solutions before custom development
- FedRAMP maturity: More commercial software products now have FedRAMP authorization, making procurement easier
- AI/ML platform adoption: Enterprise AI tools from major vendors are being licensed at scale
Who's Buying 511210 Right Now?
The federal software licensing market concentrates around a few major buyers, each with distinct procurement patterns:
| Agency | Est. FY24 Awards | Primary Focus | Key Buying Vehicles |
|---|---|---|---|
| Department of Defense | $2.8B+ | Enterprise collaboration, mission software, cybersecurity tools | SEWP, GSA IT Schedule |
Health & Human Services | $1.1B+ | Healthcare analytics, research platforms, compliance tools | CIO-SP3, GSA Schedule |
| Veterans Affairs | $890M+ | EHR integration, telehealth platforms, productivity suites | T4NG, SEWP |
| Homeland Security | $650M+ | Data analytics, case management, threat intelligence | EAGLE II, GSA Schedule |
Capture Insight: DoD alone accounts for ~40% of all 511210 spending. But DoD procurement is complex—smaller software publishers often find faster paths to revenue through HHS or VA, then use that past performance to compete for defense contracts.
What Does 511210 Actually Cover?
Unlike NAICS 541511 (custom software development) or 541512 (systems design), 511210 focuses specifically on commercial software products:
Included Under 511210:
- Operating systems and utilities — system software licensing
- Productivity applications — enterprise suites (Microsoft 365, Google Workspace competitors)
- Database management systems — Oracle, SQL Server, PostgreSQL enterprise editions
- Development tools — IDEs, CI/CD platforms, testing frameworks
- Security software — endpoint protection, SIEM, vulnerability scanners
- SaaS platforms — hosted applications with subscription licensing
- AI/ML platforms — commercial AI tools and model hosting services
NOT 511210 (Use These Instead):
- Custom application development → 541511
- Systems integration → 541512
- Data hosting/cloud infrastructure → 518210
- IT consulting → 541611
Classification Tip: If you're licensing a product you built, it's 511210. If you're building software to a customer's specifications, it's 541511. Many companies legitimately use both.
Pricing Patterns & Market Intelligence
Unlike labor-rate-driven NAICS codes, 511210 pricing varies dramatically based on product type, licensing model, and scale:
License Model Trends
| License Model | Market Share | Trend | Pricing Considerations |
|---|---|---|---|
| Enterprise Subscriptions (SaaS) | 52% | ↑ Rapidly | Per-user, per-month; 3-5 year terms common |
| Perpetual Licenses | 31% | ↓ Declining | Upfront purchase + annual maintenance (18-22%) |
| Usage-Based / Consumption | 12% | ↑ Growing | API calls, compute units, data volume |
| Site/Enterprise Unlimited | 5% | → Stable | Flat fee for unlimited agency deployment |
Notable Pricing Benchmarks (FY24 Awards)
- Enterprise productivity suites: $15–45/user/month depending on feature tier
- Security software (endpoint): $8–25/endpoint/month
- Analytics/BI platforms: $200–1,500/user/year enterprise tiers
- Development tools: $45–150/developer/month
- AI/ML platforms: Highly variable; $10K–500K+ depending on compute needs
Pricing Reality: Government buyers increasingly expect commercial pricing parity. If your GSA Schedule rates exceed your commercial pricing by more than 10–15%, expect pushback during negotiations.
Small-Business Angle (Set-Asides & Strategy)
NAICS 511210 offers strong opportunities for small software publishers, though the landscape differs from services-focused codes:
Size Standard & Qualification
- Size Standard: $38.5M average annual receipts (3-year calculation)
- Revenue Threshold: Accommodates most growth-stage software companies
- Recertification: Annual via SAM.gov—track your approach to the threshold
Set-Aside Availability
Software licensing has historically been less set-aside-heavy than services, but that's changing:
| Set-Aside Type | % of 511210 Awards | Best Opportunities |
|---|---|---|
| Total Small Business | 35% | Niche products, specialized verticals |
| 8(a) | 8% | Sole-source up to $4M |
| SDVOSB | 6% | VA has strong SDVOSB preference |
| 4% | Growing category in tech | |
| HUBZone | 2% | Price evaluation preference |
Strategies for Small Software Publishers
1. Leverage FedRAMP Authorized Status If your product has FedRAMP authorization (especially Moderate or High), you have an automatic differentiator. Many agencies require FedRAMP as a minimum threshold.
2. Partner with Large Integrators Major primes need software products for their solutions. Position your product as a best-of-breed component that integrators can resell or bundle.
3. Target Agency-Specific Needs Build vertical-specific features that align with agency missions. A healthcare compliance module for HHS or a DoD-specific security configuration can unlock targeted opportunities.
4. Use SBIR/STTR as On-Ramp R&D programs can fund initial government versions of commercial products, providing both revenue and past performance.
FedRAMP & Security Requirements
For 511210, security authorization is often the critical gate—not just a nice-to-have:
Authorization Levels
- FedRAMP Low: Minimal sensitive data; rarely sufficient for 511210 products
- FedRAMP Moderate: Most common requirement; covers majority of federal data types
- FedRAMP High: Required for DoD, IC, and sensitive civilian systems
- StateRAMP: Growing requirement for state/local procurements
- DoD IL4/IL5: Defense-specific; often required alongside FedRAMP High
Authorization Timeline Reality
- FedRAMP Moderate: 9–18 months, $250K–500K+ all-in costs
- FedRAMP High: 12–24 months, $400K–1M+ investment
- Sponsorship required: You need an agency partner to initiate FedRAMP
Market Reality: Agencies increasingly use FedRAMP authorization as a filter—products without it don't make the short list. If you're serious about 511210, budget for authorization as a market access investment.
Frequently Asked Questions
What's the difference between 511210 and 541511?
511210 (Software Publishers) covers licensing commercial software products—things you build once and sell many times. 541511 (Custom Computer Programming) covers bespoke development for specific customers. Most software companies use 511210 for product licenses and 541511 for customization/implementation services.
Do I need GSA Schedule to sell under 511210?
Not required, but highly recommended. GSA IT Schedule 70 (now consolidated into MAS) significantly simplifies procurement for agencies. Without a Schedule, agencies must use more complex contracting methods. SEWP is another strong vehicle for 511210 products.
What's driving the explosive growth in 511210?
Three factors: (1) Federal cloud-first policies pushing agencies toward commercial SaaS, (2) FedRAMP maturing to make authorization more achievable, and (3) AI/ML platforms driving new enterprise software purchases. The trend shows no signs of slowing.
How important is FedRAMP authorization?
For most 511210 opportunities, FedRAMP is table stakes—not a differentiator. Without FedRAMP Moderate (at minimum), you're excluded from the majority of cloud/SaaS opportunities. Budget 12–18 months and $300K+ for the authorization process.
Can startups compete in 511210?
Yes, but strategically. Focus on: (1) niche verticals where large vendors don't compete, (2) SBIR/STTR programs for R&D funding, (3) partnering with established integrators who need your product, and (4) building toward FedRAMP authorization early in your roadmap.
Which agencies have the fastest procurement cycles?
VA and HHS typically move faster than DoD for commercial software. GSA itself is often the fastest—they understand the IT market and have streamlined processes. For DoD, component-level purchases (Navy, Air Force units) can be faster than department-wide deals.
Start Winning Software Licensing Contracts
The 511210 market just became the largest IT NAICS code in federal procurement—and it's still growing 40%+ annually. Whether you're an established software company or a startup building your federal strategy, the opportunity window is wide open.
Track Live 511210 Opportunities & Buyers →
About CLEATUS
CLEATUS is an AI-powered government contracting platform that helps software companies find opportunities, analyze requirements, track competitors, and win more contracts—at a fraction of traditional capture costs. We aggregate federal, state, local, and city opportunities; our GovCon Copilot analyzes solicitations and your internal documents to deliver actionable market intelligence that drives revenue growth.