Some Software/Solution Companies Are Thriving in the Recovery


Non-payroll jobs continue to rise (albeit slowly), manufacturing is up, auto sales are way up, and several software firms are predicting a return to reasonable growth for 2010. Many of our clients have weathered the recession well, and are growing at rates far above the technology sector as a whole. Here are some of the factors to their success.


Encouraging Economic Indicators

The Labor department reported on April 2nd that March non-farm payroll increased by 162,000, the most in three years, but the unemployment rate stayed at 9.7% and employment is still 1.8% lower than a year ago. While past recoveries have been consumer led, this one is being led by the manufacturing sector which added 17,000 jobs in March, making a total of 45,000 new manufacturing jobs in Q1.

Factory orders for durable goods increased 0.9% in February to $178.5 billion, the third consecutive monthly increase. Unfilled orders, a sign of future demand, increased 0.5% in February.

U.S. auto sales surged 24% in March to 1.07 million cars and light trucks, up from 857,735 in March 2009 – only the third time since August 2008 sales surpassed one million vehicles. In spite of their recall issues, Toyota was one of the biggest winners – they offered various enticements, including 0% financing and their sales rose 41% in March. March’s auto sales represent an annual run of 11.8 million vehicles, far below the 16 million we saw before the recession but a big improvement over last year.

IT, Software Markets Benefiting

Last week, Oracle forecasted their fastest new license growth since mid-2008. Adobe also predicted strong growth this year.This appears to confirm the predictions of return to growth for the IT industry.

Some Solution Providers Growing Even Faster

Most of our software and solution provider clients are growing at a much faster pace than the industry as a whole. Some have seen 50%-100% growth even during these last 12 months. Some common elements to their success:

· Proven impact on profitability – solutions that have made a significant contribution to the profit of their customers have done well.

· Rapid implementation with low risk – this is one reason some SaaS vendors have been doing well, especially those who are not charging large upfront fees and have figured out how to quickly get up and running and rolled out to get value.

· Referenceable customers, who are willing to speak out – worth their weight in gold

· Targeted and focused sales and marketing – this is a drum beat for us; helping our clients know who their customer is, how to target them with a clear, compelling, and easy to embrace message. Sometimes senior management gets it, but the sales force wants to go after “anything that moves,” so sales force strategy and education is also key.

· Leveraging new marketing approaches – social media, Marketing-as-a-Service, a content and value-rich opt-in approach – here we practice what we preach and use the ChainLink brief, our directory and multi-faceted programs to drive relevant interested traffic for our clients.

· Innovation and superior customer care – a long term commitment to innovation driven by customer needs and intense dedication to providing really great customer care, infused from the top leadership on down.

The recovery may be tepid, but your growth doesn’t have to be, once you put the right formula in place.

To view other articles from this issue of the brief, click here.

Scroll to Top