Analysis of the 2015 Software Industry Survey

1. heinäkuuta 2015

The title starts very positively:  

“Growth by Finnish Software Industry, thanks to Gaming and  Small & Medium Companies" 

and continues:

Software Industry Survey 2015: Finnish software and IT-services industry grew 20,6 % year 2014. The growth was mostly due to small & medium companies and gaming companies. Many of the Nasdaq OMX noted software and IT-services companies struggle still with renewing themselves (and their business) in the midst of the industry's structural change.  

Official press release (in Finnish) 25th of June 2015

Let's break down this a bit. Eetu Luoma, researcher from the University of Jyväskylä, presented the results as follows:

Software Industry's year-on-year growth was approx €1,5 billion (€7,25 bn -> €8,75 bn).

This breaks down to three parts: 

  • Gaming industry (Supercell) grew a billion  (note: Neogames reports changes in accounting practices affect the figures presented)
  • Stock noted SW industry companies diminished by approx. -100 million (€2,6 bn -> €2,5 bn)
  • Non listed SW companies grew by approx. €600 million
  • Comparison: The global software markets grow 5-8% a year. (IDC, Gartner)

kasvu 2014..jpg

What explains the growth?

  1. Internet is an effective digital marketing and delivery channel. Sales channels like App Store & Google Play & Windows Store + B-2-B software market places actually work.
  2. Consumerism of IT and software builds up opportunities. Users want complicated work related systems to be usable in the same way as consumer services they use as private persons 
  3. Investments in growth entrepreneurship by the Finnish Government

 

The SW industry is polarizing into two types of business models, reveals the study:

  1.  Standard applications over the Internet. Best choice for "sprinters": Reacting quickly to changes in customer needs. Software firms make use of existing platforms / ecosystems.
  2. Integrated solutions. Best choice for "marathoners": Long-term, mutual relationships with customers. Providing full service: Consultancy, Implementation, Operating

Both mentioned types are service-oriented and represent the next step after customer-specific software and software products.

 

listatut..jpg

 

Conluding: 

  • Growth is driven by smaller firms exploiting digital channels and consumerism of IT. New expertise needed.
  • Industry structural change requires employing new technologies and processes. Investments in R&D efforts essential.

 

The interim results for the 2015 survey were presented in a press event on June 25th, and they're available at http://softwareindustrysurvey.fi/SlidesFinland2015.pd

#softwaresurvey2015

 

Software Industry Survey in a nutshell: Run in Finland since 1997. Year 2015 marks the 18th survey. Provides annual overview of the industry. Changing research themes; Cloud and Flexibility in 2015. The longest running software industry survey in the world.

The survey was conducted in cooperation between University of Jyväskylä and Aalto University together with Finnish Software Entrepreneurs Association, The Federation of Finnish Technology Industries and TiVia.