In an age of regular technology disruptions, growing fast has become a matter of survival for software companies. Although strong demand for IT, positive margin trends, and reasonable valuations all indicate a brighter outlook for the software industry, there are challenges that software enterprises must overcome in order to stay relevant in an increasingly competitive marketplace.
As the IT industry continues to globalize, companies that want to gain an edge over their competitors must have a clear path for advancement and growth. It sounds like a fairly simple strategy, yet a large number of software companies do not have clear career paths and opportunities for growth.
Particularly in the IT industry, employees should be able to see where their careers might take them and what new skills they can learn to advance their career. Companies that remain unable to identify and address their employees’ needs for career advancement may find it difficult to recruit and retain talent, and therefore, end up lagging behind their competitors.
Apart from challenges associated with talent acquisition, adoption of new technologies will open new path for IT companies. From drones and autonomous vehicles to augmented and virtual reality, there are a number of megatrends that are expected to produce a seismic shift in the software industry.
At the centre of this wave of innovation will be the Big Five IT companies, including Amazon, Apple, Google, Facebook, and Microsoft. These companies are expected to acquire small and midsized companies with capability in critical areas of innovation like virtual reality, artificial intelligence, and machine learning. Over the past few years, these companies have been methodical in their M&A strategy and they are expected to behave the same way in the coming years.
Intense challenge from China’s tech super-competitors is already damaging the bottom-line of the Big Five, especially in the Chinese markets. Companies like Alibaba, Tencent, Huawei, and Baidu have remained successful in their home markets and are doing aggressive efforts to extend their reach to western markets.
Finding business opportunities and seizing a larger market share in this completely revolutionized software industry will go beyond just understanding customers’ needs and building a product to fulfill it. Instead, software companies will be required to develop a clear strategic identity by building distinctive capabilities and a well-defined product portfolio.
As a retained executive search firm, Allen Austin has in-depth understanding of the challenges faced by the software industry. To enable software enterprises to overcome the challenges and seize business opportunities, we help them hire the most sought-after executive level talent that has deep insight of the current IT landscape, great leadership skills, and deep technical expertise. Our executive search and leadership advisory solutions are built around the precise needs of an enterprise and therefore, have proven to be of great value to a large number of market players.