current
Software Market Slowdown
Slowing growth in the software market requires companies to adopt disciplined product portfolio strategies and prioritize efficient R&D spending.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The software market is experiencing a slowdown, requiring companies to adjust their strategies. The report observes that "CIOs are now much more disciplined in how they buy." This has led to a deceleration in revenue growth for many SaaS companies. As a result, software companies are tightening budgets, particularly in sales and marketing. To thrive in this environment, companies need to prioritize efficient R&D spending, focusing on products that meet customer needs and generate a strong return on investment. This requires a disciplined product portfolio strategy, clear prioritization, and effective coordination between product, engineering, and go-to-market teams.
Context Signals
Increased scrutiny of software purchases by CIOs.
Decline in median annual revenue growth for SaaS companies.
Reduced spending on sales and marketing by software companies.
Edge
Companies that can effectively manage R&D spending and prioritize product development will be best positioned for success.
Generative AI could play a role in improving software development efficiency.
Valuation will increasingly reward companies that demonstrate profitable growth and margin delivery.
