Return to growth: Planning for the year ahead

It is no secret that recent times have been tough for the software industry. Growth rates have plummeted, and profitability has barely increased. Less growth at the expense of improved profitability can be an acceptable trade-off. However, this combination of decreasing growth and stable profitability emphasizes the challenges the industry is currently facing.

These challenges include rising interest rates, unprecedented inflation rates, and labor shortages. In Simon-Kucher’s Global Software Study, using a panel of over 500 B2B SaaS executives, respondents reported an average revenue growth rate below 10% in 2022. This is in stark contrast to the results from 2020 where 40% reported a growth rate above 20%.

Though, as we move into the fourth quarter, we can see inflation and interest rates stabilizing, signaling that the macro-economic conditions for the software industry have improved. As conditions are improving, SaaS companies…