The Top 5 Software Trends Impacting (Enterprise) Architects in 2023

The Top 5 Software Trends Impacting (Enterprise) Architects in 2023

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.

Stay competitive in a changing market

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.

Architects take note: Top 5 software trends for the new year

What are the Software Trends Impacting Enterprise Architects in 2023? Read my summary below:

1. (More) adoption of AI in software solutions
   Software vendors are increasingly adopting specific technologies to create immediate value for end users, and Artificial Intelligence (AI) is one of them. AI will gain more relevancy in software solutions regarding work processes for end-users (e.g., with the help of personalization or process automation).
2. Integrations and operability as part of a larger ecosystem
   Software vendors will place more focus on integrations and operability. Not only from a technical perspective (e.g., managing APIs or the rise of data platforms/ iPaaS) but also from a larger ecosystem perspective and by focusing on collaboration in different verticals and industries. This also means that software vendors must understand these industry relationships if they want to use software for change.Take healthcare, for example, where a broader view on interoperability, standardization, and integration becomes more important. Data exchange protocols and standards in the healthcare system are needed to facilitate collaboration between all parties involved in this ecosystem (for example, the patient, healthcare providers, and the hospital) to drive innovation and make an impact.
3. Addressing digital security with contextual learning
   Since technology and software are everywhere, it also becomes a weak link in organizations. Digital security is becoming more important since our lives are digitally enabled and supported. Companies can invest in technology (e.g., monitoring/ security information and event management, endpoint protection, and identity and access management), but behavior and awareness of employees are even more important. Software vendors will focus more on resilience, contextualized learning and awareness training where employees can relate everything they learn to their everyday working lives.
4. Adoption of Low/No code platforms, accelerated by IT Talent scarcity and the need to control IT maintenance costs
   How do we train or educate for all the jobs in the IT, software, and technology industries? How do we get the most out of our talent pool or retrain people?
   These questions come to the fore in light of global talent or resource scarcity, especially since so many work processes and industries are digitalized. More people are needed to maintain solutions and systems, and to continuously develop those solutions. Because of the increased need for IT professionals and software developers specifically, the adoption of low/no-code platforms will accelerate in the next years: it’s simply easier to learn working with those platforms than learning coding in programming languages. As an enterprise architect, you will be confronted more with solutions that have their foundation in low-no code platforms.
5. Creating software for social change
   There is a trend that software companies don’t start creating products that are technically great or just a good idea, but with a ‘problem worth solving’. More software companies will create solutions contributing to major societal challenges, e.g., lifelong learning, healthy aging, and the circular economy. We’ll see more of this in the future.I believe that enterprise architects could adopt the same thinking to make your work more meaningful. Instead of looking at the IT landscape in isolation or the business impact it can make, also think of how you can design architecture for social change.

About the author:

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.