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March 2018
Software Product Development
Sectorwatch
Custom software consists of bespoke applications tailored to a specific customer. Generally, this software is designed to meet a specific need that cannot be fulfilled by traditional off-the-shelf software solutions. The market is massive, estimated at $137b, and growing driven by emerging technologies (cloud, big data analytics, etc.) and improving corporate budgets.
Industry Trends:
- Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
- Current gross profit margin is less than the average of the last 3 years gross profit margins, indicating customer pricing power
- Current EBITDA margin is less than the average of the last 3 years EBITDA margins, which may signal further consolidation