Externalized software services will help companies cut costs, PwC study says

While 2010 was “a year of consolidation” for the Romanian software market, in which the value of the market was similar to that of 2009, pundits expect an accelerated pace of change in the market for future years. Companies will head in the direction of externalized software services as a reasonable cost-cutting measure, important for preserving liquidity in a strained economic environment, according to a study made by PwC called Global Software leaders key players & market trends.

“The local market is split between major international companies and local entrepreneurial software producers whose future growth might attract the interest of ambitious global software players, hungry for inorganic expansion,” says Dinu Bumbacea, PwC Partner, Advisory, Technology, Information, Communications and Entertainment Group Leader for CEE.

He also said that most of the Romanian entrepreneurs prefer to create a strong product that could be later sold to major global software producers or to investment funds. “Romania is well known for the quality of the available IT skilled workforce, and 6 of the first 10 global software producers have production units in Romania as well”, he explained.

“The resurgence of capital markets, including venture capital and private equity investments, along with technologies such as cloud computing, are helping to keep innovation alive within the sector. Consolidation in the sector continues at a torrid pace as companies continually re-evaluate their strategic priorities and inorganically fill important gaps in their product offerings”, added Bumbacea.

The global trends driving the software industry at the moment are the explosion in popularity of mobile devices such as smart phones and tablets and the consumerisation of technology.