2020 was a year marked by great uncertainty and truly exceptional circumstances caused by the COVID-19 pandemic. The global economy contracted as nations around the world imposed restrictive measures on their citizens in an effort to control the outbreak of the virus. Despite the adverse economic developments, the industry environment for SoftwareONE remained robust. The underlying dynamics driving the global markets for software and cloud and solutions and services remained intact in 2020. The industry continued to experience solid growth, driven by technology spend catalyzed both by the growing complexity of technology and the rising strategic significance businesses attach to digitization. In fact, the impact of the COVID-19 pandemic on businesses, their workforces and their customers, around the world forced businesses to adjust and accelerate the implementation of their digital transformation strategies to virtualize workplaces for employees, enhance customer experience through digitization and unlock the value of their data, creating agile and innovative environments and tools, all enabled by cloud-based solutions and services.
Technology is becoming more important and complex for companies, increasing the need for SoftwareONE’s solutions
Given the swift pace of change in today’s market, customers face many challenges that need addressing, which as a result of the outbreak of the COVID-19 pandemic have accelerated. Even before the pandemic, technology had become not only more important but also more complex for companies. As a result businesses increasingly look for business advisors, like SoftwareONE, as they face talent shortages and vendors asking them to buy software through partners. While this is in line with the strategic direction that SoftwareONE has been pursuing in recent years in terms of increasing service adoption among its customers, this is now expected to be implemented at a swifter pace.
Software & Cloud
Despite the economic impact of the COVID-19 pandemic and in light of the robust development seen in the IT sector in 2020, SoftwareONE expects the industry to continue on its growth trajectory. According to Gartner, global software spending is forecast to grow between 9% and 10% in 2021 and 20221, with growth across all major geographic regions and businesses of all sizes.
SoftwareONE experienced a decline of 1.9% in gross profit on a constant currency basis during a challenging and uncertain year, while the market declined around 2.5% in 20201. SoftwareONE remains well positioned to outperform the software and cloud market as proven in past years. The company will therefore continue to focus on providing customers the broadest and most global software and cloud offerings which serve as the foundation for their commercial, technology and eventually digital transformations.
1) Gartner 'Worldwide IT Spending Forecast' January, 2021
Solutions & Services
Global spending in SoftwareONE’s total addressable market for solutions and services, as expected by industry experts at the time of the IPO, is forecast to grow at a CAGR of 17% to CHF 58 billion in 2022. As a result of its investment in end-to-end IP-based capabilities across the entire technology solutions value chain, SoftwareONE has significantly grown its Solutions & Services business, achieving accelerated growth in gross profit of 23.9% in 2020 on a constant currency basis. Customers required SoftwareONE’s support in driving digital transformation in a business environment heavily impacted by the COVID-19 pandemic. As a result of a number of incubation initiatives, SoftwareONE believes it has expanded its addressable market and expects to participate in the corresponding market upswing.
SoftwareONE believes that the combination of its Software & Cloud and IP-based Solutions & Services focus, and its strategy to enable commercial, technology and digital transformation for its customers, as explained in the Business Model section of this report, positions the organization well to further capitalize on favorable industry trends and to continue to gain market share in a highly fragmented market. SoftwareONE diverse, global teams bring deep industry and functional expertise to spark change through leading-edge solutions and services as well as consulting expertise. Teams work according to a collaborative model across SoftwareONE and throughout all levels of organizations to deliver results that help customers thrive. In addition, SoftwareONE derives valuable industry insights through its customer projects, market research and customer advisory board.