Software is increasingly playing a critical role in the efficiency and effectiveness of all work processes in various industries. Over the last decades, we’ve seen that software has a disruptive power with the ability to create or make some jobs obsolete.
Not only technology industries but end markets too, are impacted by software. It’s a major driver for digital transformation and digitalization in many industries and the wider society. Due to all these factors, for decades now, the software industry has shown double-digit growth.
Main Capital Partners has been investing in enterprise software companies for the last two decades – we also acquired a majority stake last year in Bizzdesign, an enterprise architecture and BPM SaaS platform vendor. Our Market Intelligence and Performance Excellence practice is dedicated to, among others, tracking trends and drivers of the software industry. We observe new technologies rising in the market and look at the business and societal implications of these.
One thing that I’ve found helpful for customers is to gain insight into the market dynamics of the software industry. As an architect, you may help C-level management make the right transformation – and software – investment decisions. You may be confronted, perhaps daily, with yet another new SaaS tool that has the promise of addressing user needs in the business. From that perspective, it’s important to gain knowledge of where software vendors will be heading in 2023.
Looking back – during the pandemic, we’ve witnessed an accelerated effect of digitalization in many end markets. For example, in education, we saw significant growth in e-learning and virtual classroom software and more horizontal business software for digital collaboration. That led to many new SaaS start-ups jumping on these digitalization waves. However, many software solutions were invented based only on a ‘good idea’, a promise of high growth and without a proven profitable business model.
The dynamics changed in the last year. Economic uncertainty and an increase in interest rates placed the focus again on software companies with a proven product-market fit and with successful, profitable business models.
This shift from ‘everything related to digital = potentially interesting for our company’ to ‘let’s focus on SaaS solutions that really matter, are robust and are delivered by reliable, profitable growth Independent Software Vendors (ISVs)’, is relevant for enterprise architects. After all, apart from the question: ‘How does this solution fit technically and architecturally in our IT landscape, and which business use cases does it support?’, it also emphasizes the predictability and reliability of the ISV and its delivery process.
What are the Software Trends Impacting Enterprise Architects in 2023? Read my summary below:
Bram Kaashoek is a strategist with more than 15 years of experience in consulting and managerial roles. Bram is currently a Partner at Main Capital Partners. Main is an investment firm in the B-to-B enterprise software industry in the Benelux, DACH, and Nordics regions with more than Euro 2bn in assets under management. Bram heads the international Market Intelligence & Performance Excellence Practice. The Market Intelligence practice researches the software industry, specific segments, and economic and technological trends and drivers. The Performance Excellence practice assists portfolio firms with strategic advice and implementation (financial management and operations, go-to-market and strategy, product management and technology), driving profitable growth.