The short answer is that they don't hang out together, at least not the people that you describe. What I mean is that your description is too broad.
Executives (at least those in large companies) don't hang out with managers. Executives make hundreds of thousands or even millions of dollars a year. Managers make much less. Executives are older, managers are younger. And most importantly, they care about different things - Executives think big picture and set strategic direction, directors and managers are more tactical and mired in the details.
Also, companies that build software for sale do so in their R&D or Engineering departments. People that lead those departments are tasked with innovating and bringing new products to market that grow revenue. Companies that build software for internal use do so in their Information Technology departments. An IT department is an internal service center that works for other departments in the company. People that lead IT departments are typically tasked with improving service levels and reducing costs. Managers and executives in a software R&D department care about very different things than managers and executives in an IT department.
When you have a product that can be used broadly, it's very hard to take it to the entire market at once. It's much easier to identify a smaller sub-market to attack first. One company I worked for called Documentum made software that helps large companies manage their electronic documents. All larger companies need this, but they started by targeting Pharmaceutical companies - specifically those departments within the Pharma companies that have to submit New Drug Applications to the FDA. They knew that if the Pharma companies could submit their applications faster, they would be approved faster, and this was worth a lot of money to the Pharma companies. By focusing on that one business problem in that one industry, they got the traction they needed to be successful. This is the approach that is recommended in the great book "Crossing the Chasm" by Geoffrey Moore.
