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. Secrets of Software Success. Quick overview of Global Software landscapeDimensions for key segmentsMacro-economic industry trendsTraditional success factors in software industryBuilding blocks for successful software companies in the futureOpen discussion. Although packaged software is th
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1. Secrets of Software Success: Chapter 2007 Forthcoming slides contain notesForthcoming slides contain notes
2. Secrets of Software Success
3. Although packaged software is the smallest revenue producer in the high tech sector
4. it has captured the largest share of market value
5. Defining the Software Industry landscape
6. Packaged software industry landscape by functionality
7. Secrets of Software Success
8. Macro-economic industry trends- observations
9. Software industry is maturing with improved marginsand stabilizing sales growth 1. On the whole, the relatively young software sector is stabilizing
1. On the whole, the relatively young software sector is stabilizing
10. Long term implied growth rates rank software near top of industry sectors 1. Markets expect high single digit growth rates for most software players.
2. Will norms and expectations from other mature industries begin applying to software?1. Markets expect high single digit growth rates for most software players.
2. Will norms and expectations from other mature industries begin applying to software?
11. Size of company remains a significant driver of margins 1. The wide gap in margins are directly correlated with segment size
2. After growth rates, margins are a key differentiator in software valuations1. The wide gap in margins are directly correlated with segment size
2. After growth rates, margins are a key differentiator in software valuations
12. Global software deal volume and values are growing steadily Notable PE/VC Deals: $0.2 B Akamai (2003), $0.6 B Red Hat (2004), $1.26 B Serena Software (2005), $1.3 B Intergraph Corp (2006) Notable PE/VC Deals: $0.2 B Akamai (2003), $0.6 B Red Hat (2004), $1.26 B Serena Software (2005), $1.3 B Intergraph Corp (2006)
13. Software supply continues to globalize 2005 Computer science graduates/year
Thousand
14. Secrets of Software Success
15. Traditional software premises and corresponding success factors
16. Invest in people Given the crucial importance of the people dimension, huge investments in this field are required and justifiedGiven the crucial importance of the people dimension, huge investments in this field are required and justified
17. Turnover management
18. But the world has changed
19. Tide is shifting from a story of consolidation to one of business model changes, innovation, and globalization
20. Secrets of Software Success
21. What will be the building blocks for successful software companies?
22. 1. Customer experience really does matter Source: MGI
Source: MGI
23. Areas that must be worked to professionalize the Go To Market approach
24. 2. Optimize software supply chain
25. Historically, R&D levels have not correlated well with growth
26. Incorporate customer-developed components into your products
27. New software players within emerging markets
28. 3. New platforms will become more important growth drivers
30. 4. Productivity creates leadership
31. Wide dispersions in productivity exist
33. 5. Ecosystems must be managed to capture maximum value
34. Future software company operating model?
35. Contact Information