Softwaresector update Q2 2022Important disclosures appear at the end of this reportGP Bullhound Corporate Finance Ltd and GP Bullhound Asset Management Limited are authorised and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRAGP Bullhound Hong Kong Limited is authorised and regulated by the Securities & Futures Commission GP Bullhound Luxembourg Sàrl is authorised as an AIFM in Luxembourg by the Commission de Surveillance du Secteur FinancierQualitative insights into broader Software trends and public and private valuations across the transaction spectrum, and interviews with today’s leaders transforming the sector.
2TakeawaysTHE VIEWQ2 Software Perspectives from GP BullhoundTakeaways▪ Rust established itself as a multi-paradigm, all-purpose programming language▪ Rust has recently experienced a sharp uptick in popularity due to its simplicity ▪ Big tech companies are rapidly deploying Rust due to its broad use-casesRUST BUILDS UP▪ Continuous technology adoption has created a new web of compliance issues▪ In response, regulators are legislating continuous software monitoring laws▪ Continuous cyber-monitoring platforms have attracted private market investorsTHE NEW COST OF COMPLIANCE▪ The current market has harshly re-evaluated unprofitable software companies▪ Profitability became a much more realistic valuation metric for public markets▪ Industry leader VCs are advising software companies to focus on profitabilityPROFITABILITY RE-DISCOVERED▪ Deployment has become a costly bottleneck for software providers▪ The need for cheap and end-to-end deployment outsourcing has presented itself▪ Continuous Deployment-as-a-Service solutions are filling the gap in the marketCONTINUOUSDEPLOYMENT-AS-A-SERVICE ▪ Enterprise software budgets are shrinking due to the current market turbulence ▪ Usage-based pricing is replacing seat-based and subscription-based models ▪ Adoption of usage-based models is growing rapidly among tech giantsUSAGE-BASED PRICING IS TAKING OVER
3Current software perspectives from GP BullhoundGP BULLHOUND’S SECTOR TAKEAWAYS Sources: Infoworld, SD Times, TechCrunch, Wall Street Journal, VentureBeat (as of 30 June 2022)TakeawaysContinuous Deployment-as-a-Service▪Large-scale deployments have always been a significantly tasking mission on top of software development. Multiple platform integrations, hidden costs, professional planning requirements, and IT infrastructure challenges are some of the obstacles that companies face when undertaking deployment projects▪In today’s SaaS ecosystem, deployment has also become a painful task at smaller scales due to time and resource constraints that are faced more commonly in the lower tiers of the sector▪As a response, companies like Armory are bringing Continuous Deployment-as-a-Service solutions to the market by undertaking all levels of deployment on behalf of their clients at reasonable costs....
