Whitepaper Analysing recent trends in enterprise software, adapting to economic and technological shifts

What is behind the recent underperformance of the software sector

Even though the software sector has historically outperformed the broader market due to its innovative capabilities and significant contributions to business productivity, recent data indicates a relative slowdown in the public market performance over the past year. According to our research, this slowdown in growth is not isolated to public software companies. Data on over 1,000 randomly selected private software companies in our core regions (Benelux, DACH, Nordics, USA) reveal a similar trajectory.

In our latest whitepaper the Main Capital Partners Market Intelligence Practice explores the current state of the enterprise software market and the three key factors that may be contributing to the deceleration of growth. These factors are:

1. A deliberate strategic shift towards sustainable, profitable growth, which involves prioritizing stable revenue streams and positive EBITDA margins over rapid growth requiring a recalibration of growth expectations and influences financial performance.
2. The surge in AI spending leading to a change in how organizations allocate their IT budgets, which in turn affect software market dynamics and future growth.
3. Broader macroeconomic headwinds such as inflation, margin pressures and a slowing global economy, impacting organizations’ willingness to invest in new software solutions.

Download the whitepaper below to learn more about these factors, and discover key takeaways for software businesses.

Main Capital Partners positive about the sector

At Main Capital Partners we have always been focused on investing in software companies that show stable, profitable growth in robust product markets whereby solutions enable core business processes. Further, our Performance Excellence team, supports Main portfolio companies in tackling these headwinds.

Hence, these market trends signify minimal changes to our strategy. It is well aligned with the current dynamics and we are enthusiastic about the sector’s ongoing transformation and adoption of new technological advancements.