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Learning from success: PwC’s Top 30 Emerging Markets Software Companies

kets Software Companies

Globalisation of the software industry is creating emerging-market stars

NEW YORK, 2016-11-14 16:56 CET (GLOBE NEWSWIRE) --
Established software companies in mature markets now face true competition, as
well as partnership opportunities, in markets across the globe. But how do they
survey the landscape for threats and opportunities?

An infographic accompanying this announcement is available at

PwC’s new ranking, Emerging Markets Top 30 Software Companies, identifies
intriguing characteristics, common advantages and disadvantages, and signs for
success among software companies based in emerging markets. Through the
research, conducted with International Data Corp., PwC developed a snapshot of
how successful software companies in emerging markets gain traction—growing
from regional vendors into global players.

To view the complete list and read PwC’s analysis, click here.

“Most of the companies in our ranking have built their businesses on regional
strengths and local needs—for instance, security software in Eastern Europe and
ERP software in Asia,” said Raman Chitkara, PwC’s Global Technology Industry
Leader. “It remains clear, however, that major software vendors in the
developed world will maintain influence and power.”

Bolstering this point, the 30 companies on PwC’s list represent a mere 1.4% of
global software industry revenues, and have revenues equal to 1.9% of the
Global 100 Software Leaders revenues.

Characteristics of emerging-market software vendors

Most of the companies on our list are more than 10 years old and they’ve been
working toward this success for a while. They’ve achieved it through cost
advantages, and by tapping regional strengths. They’ve done it the way
companies have become successful for years—they started small and became
incrementally bigger and stronger.

Two-thirds of the Emerging Markets Top 30 Software Companies are located in
Asia; China alone comprises more than 40% of the total (13). Eastern Europe,
including Russia, represents almost a third with nine companies, and Brazil has
one company on the list.

Dominating the ranking, Asia-Pacific is characterised by the dual advantage of
low-cost developers and an expanding market. This region not only focuses
strongly on technology, but it also has the ability to leapfrog legacy
technologies. Given the prevalence of manufacturing in Asia, it stands to
reason that most Chinese companies on the list develop software relating to
manufacturing or logistics.

A specialised grounding in the intricacies of each local market is a critical
element of success. This is a core part of the foundation that ultimately
enables these companies to go global.

“Successful companies recognise the value of localisation,” said Mark Jansen,
PwC Singapore’s Technology, Media and Telecommunications (TMT) Leader. “This is
especially important in Asia, where mobile technology enablement is critical
because some countries have almost four times the penetration of mobile
Internet versus broadband.”[1]

Advantages of emerging-market companies

PwC’s research uncovered several core advantages among the Emerging Markets Top
30, and these are common across regions.

Cost Developer salaries are low in comparison to more mature economies.
Populat Emerging markets have high levels of tech-savvy millennials who are
ion likely to adopt mobile applications quickly.
Proximi Software vendors can establish a foothold by becoming invaluable in the
ty local market and then expanding.
Educati Excellent educational systems (think math and science in Eastern
on Europe) help them tackle complex software, such as security.
Culture Employees in many emerging-market countries are hard workers as they
strive to improve their economic conditions.
Trailbl Entrepreneurs are inspired by existing successes: India’s Infosys,
azers China’s Alibaba, South Korea’s Samsung.

The strength of emerging markets in part derives from their burgeoning
millennial populations, most of which feel more comfortable with mobile
devices, and many of whom might never have owned a personal computer. These
consumers represent significant market opportunities.

Foundational challenges within emerging markets

All is not rosy, however, as the advantages face counterweight disadvantages,
and emerging-market software companies’ odds for success are not high, for
several reasons. Although the Top 30 have proven their staying power, many must
still answer whether they can effectively scale.

Given that developed countries tend to default to names they know and companies
they trust, emerging-market companies may suffer from lack of visibility and
brand awareness.

Other issues—largely economic and financial—can also plague these companies.
Access to capital, ability to hold onto talent and lack of a meaningful global
presence, are common challenges.

Looking forward in a changing world

As globalisation continues, we will begin to see a rationalisation of all these
issues. It will be faster and cheaper for emerging-market companies to
establish themselves. Led by trends across the Internet of Things, artificial
intelligence and cloud computing, the software industry will witness new
leaders emerging and the potential disruption of well-established players.

PwC’s Jansen notes that in five years, the software world is likely to witness
significant changes. Winners will become prominent, regardless of their country
of origin. Enterprises will continue to look for cheaper, more reliable
software—sometimes even without it being rich with features. “As OEMs from
developing countries become bigger global players, they will likely consider
options their counterparts in the developed world may not have considered,”
noted Jansen.

For more information and to download the Emerging Markets Top 30 Software
Companies report, click here.

About PwC’s Emerging Markets Top 30 Software Companies and the Global 100
Software Leaders

The PwC Top 30 Emerging Markets Software Companies is based on corporate
financial statements (GAAP-based where applicable), other public sources and
estimates for privately held companies, as compiled for PwC by the Global
Software Business Strategies Group at International Data Corporation.

The ranking is based on year-to-year growth rate in software revenue from 2013
to 2014, the most recent year for which complete data was available. Due to
variances in fiscal years, the results were ‘calendarised’ for both years.

PwC recently launched the fourth edition of its Global 100 Software Leaders
ranking since 2010. The current edition continues our tradition of monitoring
and analysing the leading companies and trends in the industry. Our goal is to
help our clients understand both the obvious and the underlying forces
influencing the software industry.

The new PwC Global 100 Software Leaders list is based on corporate financial
statements (GAAP-based where applicable), other public sources and estimates
for privately held companies, as compiled for PwC by the Global Software
Business Strategies Group at IDC. Learn more about the report’s methodology

About PwC

At PwC, our purpose is to build trust in society and solve important problems.
We’re a network of firms in 157 countries with more than 223,000 people who are
committed to delivering quality in assurance, advisory and tax services. Find
out more and tell us what matters to you by visiting us at

©2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or
more of its member firms, each of which is a separate legal entity. Please see further details.

[1] PwC Global entertainment and media outlook 2016-2020


Nicholas Braude, PwC
Tel: (617) 530-5435

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