A few years later, when the internet became more widely used, the software delivery method changed from physical to digital, using methods such as online downloads. For this reason, many software companies (also known as dot-com companies) tried to figure out how to shorten the SDLC process in order to deliver software that was capable of beating their competitors.

Many developers started to adopt new methodologies, such as incremental, iterative, or agile models, in the hope that these could help shorten the time to market. This meant that if new bugs were found, these new methods could deliver patches to customers via electronic delivery. From Windows 98, Microsoft Windows updates were also introduced in this manner.

In agile or digital models, software developers write relatively small modules, instead of the entire application. Each module is delivered to a QA team, while the developers continue to work on new modules. When the desired modules or functions are ready, they will be released as shown in the following diagram:

This model makes the SDLC cycle and software delivery faster and easily adjustable. The cycle ranges from a few weeks to a few months, which is short enough to make quick changes if necessary.

Although this model was favored by the majority at the time, application software delivery meant software binaries, often in the form of an EXE program, had to be installed and run on the customer's PC. However, the infrastructure (such as the server or the network) is very static and has to set up beforehand. Therefore, this model doesn't tend to include the infrastructure in the SDLC.