Abstract :Innovation is essential action for any organization to compete and continue to be successful in their market. Since software industry continuously change and improve second by second, innovation is even more crucial for this sector. It is no longer enough to have knowledge about innovation and its advantages, companies also need to know the factors affecting innovation to see the big picture. If companies know factors that foster and impede innovation, they would manage their innovation activities more effectively. In this work, the aim is to identify factors affecting innovation in software companies through applying a systematic research design and interviews with key informants. As a result, 34 factors are identified and grouped under seven main headings. Keywords : Innovation Management, Factors Affecting Innovation, Software Companies
