I’ve been talking to someone today about what the software industry and SaaS game is like to work in. Just saying it’s “fast-paced” or “ever changing” didn’t quite cut it. Those of us in the industry will appreciate my description as they’ll be aware of the ever deepening layers of complexity when you consider software trends, business models, competition, social networking and all the factors that software co’s are based on – are changing rapidly – and often.

So here goes! My attempt to describe the industry:

“Being in the software industry these days is like trying to build a house on top of a train travelling at 200kph heading towards a tunnel – and the train tracks are still being built with no indication as to where they’ll lead to!

And all the time you’re trying to get people to rent a room in the house you’re building on top of the train!

And did I mention there were 50 other trains all heading toward the same tunnel?”

How’s that for an adventurous ride! I’d be keen to hear other people’s thoughts on the industry and how they’d sum it up in an ‘elevator pitch’.

I keep thinking though, how are the young kids coming through ever going to be trained sufficiently at any college to understand, be a part of, or excel in this new world? What they learn at school/tech is outdated when they leave, and you can’t guess the future trends enough to teach them.

It’s definitely going to breed some new thinkers in the coming generation. The new blood is going to have to ‘hit the ground running’ in highly competitive markets with little credibility or resources – only ideas and limited skills.

It’ll mean some really creative ideas will come through – possibly new business models, but my concern is that (in very general terms) we’re going to end up with a few ‘fad mega-successes’ or ‘mega-mergers and acquisitions’ and a huge number of struggling niche ideas with good revenue. Sustainability will become a rarity. This is a “very general idea” of what could happen based on my knowledge, talking to hundreds of software co’s and some guesswork.

Year: 2000
20% – Struggling Software co’s
75% – Average Software co’s
5% – Successful Software co’s

Year: 2004
40% – Struggling Software co’s
56% – Average Software co’s
4% – Successful Software co’s

Year: 2008
60% – Struggling Software co’s
27% – Average Software co’s
3% – Successful Software co’s

Year: 2012
75% – Struggling Software co’s
23% – Average Software co’s
2% – Mega Successful Software co’s

Year: 2016
85% – Struggling Software co’s
14% – Average Software co’s
1% – MEGA Mega Successful Software co’s

With the increase in competition, speed of new players (coming and going) and more M&A’s by Google and others… This is how I see it going. I hope I’m wrong, but time will tell…

Author: Julian Stone – www.julian101.com / www.proworkflow.com

Julian Stone

Julian Stone here, CEO of www.proactivesoftware.com, developers of www.proworkflow.com (Project management software). I’m a chronic serial creative thinker and have a passion for creativity, business and entrepreneurship. Since the early days at school til the current adult days I’ve been involved with many businesses, in many forms, but the real passion I have is designing ideas from scratch and seeing them through to completion. I love startup businesses and their associated challenges; the fact that the more you learn, the more you realize you don’t know! Every day is an opportunity to meet a new person, learn a new skill, tackle a new challenge! My personal background is 15yrs in graphic design, ad agencies, 3d animation, video editing, multimedia, print, prepress and other creative persuits. About 1999 I was made redundant, mostly due to a failing internet company I was working for at the time. It was also about the time of many ‘.com boms’ where many startups failed due to a distinct lack of any real business plans, paths to revenue or just crazy and unrealistic business ideas. I saw from the inside out, what happens when a company collapses. It was messy, complicated and a lot of people were hurt, both emotionally and financially. However, amidst all this came a blessing! I met my wife, Sarah, who was was also working for the company. Out on the street at age 25 and not many jobs available, it was ’sink or swim’. I chose to ’swim’, and started contracting initially, then business, and haven’t looked back. There have been hard years, and I’ve learned a lot, but heading down the business path rather than employee path was the best decision I’ve made career-wise. I’ve surrounded myself with many like-minded friends and look forward to an exciting ride ahead! This blog is designed to discuss my thoughts on matters (yes, I’m very opinionated) and to share lessons I’ve learned from people, books, experience or the school of life. ;-)

  • In future there will be a massive number of (long tail) niche markets to serve. ISVs that try to apply the old-ways to serve these new niche markets will struggle. They must slim down, focus on business value and leave the technology to others (for example with PaaS.)

    This is a big challenge for many of us in the IT industry; we like to play with technology! For many people the future will be “IT as a hobby” and no longer “IT as a career”.

  • Re: For many people the future will be “IT as a hobby” and no longer “IT as a career”.

    You may be right! And furthermore, the tipping point of change could be the next 5 years!

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