Core to IDC's market models and a foundation to IDC's methodology, IDC continues to maintain a Software Taxonomy which provides a strict classification system for worldwide packaged software revenue. The functional software markets defined by the taxonomy represent a collectively exhaustive and mutually exclusive view of the worldwide software marketplace.

For 2006, the taxonomy includes 85 individual functional markets grouped within three primary segments of "packaged" software: applications, application development and deployment (AD&D) software, and system infrastructure software.