Enterprise Software: Weathering the Storm | Analyst Notes | Deep Analysis

Enterprise Software: Weathering the Storm

After these past few months, it has become clear that not every enterprise software firm is addressing or weathering the storm equally well. That said, enterprise software has, overall, been thriving amidst the pandemic and, at this point, has a good chance of emerging relatively unscathed. The fact is that nothing runs without software, pandemic, or no pandemic. Moreover, the problems of supporting remote workers, critical supply chains, and transactions have elevated the role of enterprise software and investment in improving those systems to critical levels. Not everyone is catching a fair wind; some firms we have talked to have panicked and battened down the hatches, some going as far as stopping many day to day operations. Others have done the opposite and expanded services and are investing heavily in new growth and market opportunities. We are currently working with clients that are modifying their go-to-market strategies, exploring new markets, and looking for acquisitions. A few others have essentially shut shop.

Some, if not much of this all comes down to human psychology rather than strategic planning. Some assume the worst, some hope for the best, and both sides of the equation act accordingly. That is understandable, and no amount of good counsel will likely shift perspectives. But some announcements and changes to operations do leave you wondering what is going on. A couple of firms we track have had excellent financial returns this year, but have nonetheless decided to ax staff and freeze or reduce salaries. In one of these firms, morale is already very low, while profits are high. Trashing workers in their time of need seems short-sighted, and let’s not even get started on the morals and ethics of such moves.

But post-pandemic, whenever and whatever emerges, there is little doubt that sections of the enterprise software industry will surge to new highs. The newly structured work environments will require support, adaptation, and in many cases, complete overhauls. Automation of manual activities will be high on many corporate agendas, so we can expect to see everything from ML & AI to RPA get a boost. Technologies that eliminate or reduce the need for paperwork such as Blockchain & Capture will also be beneficiaries.

But the mantra of better, faster, and cheaper just won’t cut it in the new world. Priorities are shifting to beneficial, adaptable, and economical. Beneficial in that IT investments benefit more than just the bottom line. Adaptable because we know things are changing, but we don’t know what the changes will look like. Economical in as much as some significant expenditure will be made to protect the future. Short term cost-cutting may be necessary for immediate survival, but it often comes with a longer-term downside.

We love to hear your insights and observations, nevermore-so in such turbulent times. If Deep Analysis can help you with your business then let us know. But even if the time for that is not right, we would still love to hear from you and hopefully we can all chart a better path forward.

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