Software 2017

Battery Ventures put out a great slide deck on the state of the software industry in 2017 as part of the recent CloudNY event.

Here are a few notes from the slide deck:

  • 18.3% expected compounded annual growth for SaaS companies over the next four years (compared to 6.9% for general software)
  • Software industry in the United States supports 10 million jobs
  • The Five Forces of Software’s Accelerating Growth
    • Existing software markets are growing over time
    • Software is infiltrating what were once niche markets
    • Software is displacing hardware
    • Every company is becoming a software company
  • 60% of organizations to increase spending on cloud applications
  • The global software industry is $500 billion per year
  • Continuing at a 5% compounded annual growth rate, software will be $1 trillion/year by 2030
  • Category kings consistently captured more than 70% market share
  • Tactical considerations:
    • Software innovation is now global
    • There are competitors in all segments of the market
    • Product now drives software sales
    • Network effects and ecosystems build moats and drive stickiness
    • AI and machine learning are enabling applications
    • Microservices architectures and rapid product delivery are now must haves
    • Culture is paramount and employee feedback is public
    • Find a wedge and change the market dynamic
    • Grow fast or die slow

Check out the slide deck on the state of the software industry in 2017.

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