High-technology innovation is essential for economic development in industrialized societies. However, innovation practice in smaller software companies has received little attention. We derive software innovation drivers and outputs from a fragmented literature and analyze their empirical relevance using qualitative data from 25 in-depth interviews with software executives in the Silicon Fen. Repeating patterns in the data set revealed through content analysis show that the most important innovation drivers for smaller software firms are external knowledge, leadership and team processes. Specialized innovation tools and techniques are hardly used. We develop a model of software innovation drivers, together with explorative theoretical propositions.