The recession of 2008 took its toll on many different industries and the software industry was certainly no exception. With the recent release of the 2015 Software & SaaS Industry and Benchmarking Report on Sept. 10, produced by OPEXEngine, in partnership with the Software and Information Industry Association (SIIA), it was revealed that the software industry is poised to have even greater acceleration in topline growth.
Rhianna Collier, Vice President of the SIIA Software Division, said, “This year’s report confirms that the recent financial gains are more than just a short-lived bump. The software industry continues to see healthy revenue growth and, importantly, the level of growth is accelerating and leading to more jobs. With small- and mid-sized software companies showing such strength, it’s not surprising that significant levels of venture capital are flowing into their operations.”
While the west coast is leading the east coast in the industry, there is much more to be said and revealed in the 2015 report. Let’s dive into the report’s key findings:
Growth is Strong
The benchmarking report revealed that the top 25 percent of companies (based on revenue) surveyed experienced growth of 150 percent from 2013 to 2014. Combined with the rest of the companies that were surveyed, all private firms reported average growth of 55 percent for 2014 which is a 13 percent increase from the previous year’s report.
These high amounts of growth mean that companies are continuing to stay healthy and prosperous in the recovering economy from the 2008 recession and also means that there is more opportunity for job creation.
More Hiring Planned
The increase of fast growing companies means that there is more work to do and more people needed to get the work done. That is absolutely true for the state of the software industry as the 2015 benchmarking report revealed. The fastest growth companies plan to increase employee headcount by 43 percent (on average) by the end of 2015, an increase of 5 percentage points from last year’s 38 percent planned increase. All private companies plan to increase headcount by 31.5 percent which is up from 26.4 percent last year.
The software industry revenue growth and hiring landscape are continuing to improve and that is paving the way for more innovation. The growth also is great news for job seekers and companies alike since this year’s report revealed an even more positive outlook than the 2014 report, which had been the most positive to date.
The report was compiled from the input of more than 100 small- and mid-sized B2B software and SaaS companies, and is based on and compared to nine years of benchmarking data from more than 300 companies. For this ninth annual report, the more than 100 companies that were surveyed by OPEXEngine, primarily private (22 percent are public) business-to-business software and SaaS (Software as a Service) companies, had revenues between $3 million and $300 million. Comparing the west coast to the east coast in this industry, west coast based companies are attracting about 2.5 times as much investment capital as those based on the east coast.
SIIA is the leading association representing the software and digital content industries. SIIA represents approximately 800 member companies worldwide that develop software and digital information content. SIIA provides global services in government relations, business development, corporate education and intellectual property protection to the leading companies that are setting the pace for the digital age. The SIIA Software Division provides a forum for companies developing the applications, services, infrastructure and tools that are driving the software and services industry forward. For further information, visit www.siia.net/software.
OPEXEngine is the industry leader in delivering financial and operating benchmarks for the technology industries. OPEXEngine’s benchmarking reports are key tools used by senior operating executives to support the budgeting, strategic planning and investment process. In addition, OPEXEngine’s On Demand Financial Insights Reports deliver company and industry comparisons in the areas of valuations, revenues, cost and expenses, profitability, employee productivity and cash management for any US public company, created on the fly in minutes. For further information, visit www.opexengine.com.