SoftwareONE’s strong track record of profitable growth is attributable to the successful execution of a business strategy focused on growing and digitizing its Software & Cloud business, cross-selling and up-selling services, expanding its portfolio to serve its customers’ digital journeys and scaling its global-local operating model. The company continues to supplement its organic growth with a strategic M&A program.
Grow and digitize Software & Cloud
SoftwareONE intends to continue growing and digitizing its Software & Cloud business line by acquiring new customers and, in particular, leveraging its existing large and diversified customer base of around 65,000 customers worldwide. This customer base continues to provide significant additional gross profit potential through contract renewals, volume and feature upgrades and growing SaaS and cloud adoption.
Additionally, SoftwareONE aims to enable self-service by its customers via Marketplace and offer Digital Supply Chain solutions to larger enterprises who seek to outsource the procurement of their tail-end software and cloud spend. Both motions are powered by PyraCloud, which continues to gain ground in terms of customer usage.
At the end of 2021, over 80% of SoftwareONE’s customers were activated on PyraCloud and monthly usage grew 74% YoY compared to 2020. The company’s ambition is to continue increasing the levels of customer activation and usage in the coming years.
Cross-sell and up-sell Solutions & Services
SoftwareONE continues to cross-sell and up-sell services to its customers. In particular, it continues to leverage its large Software & Cloud-only customer base to increase the number of customers who purchase both software and services, thereby driving share of wallet.
The company estimates that customers who purchase from both its Software & Cloud and its Solutions & Services business lines generate 8.9x the amount of gross profit than Software & Cloud-only customers and that they accounted for approximately 71% of gross profit in 2021. The corresponding metrics for the prior year period were 7.9x and 63%.
The XSimple offering, which is based on Microsoft 365 or Azure, is a key example of successful cross-selling. SoftwareONE’s XSimple offering grew >80% YoY in gross profit in 2021 compared to the prior year period.
Expand portfolio to serve customers’ digital journey
SoftwareONE continues to expand its cloud-only and IP-enabled Solutions & Services portfolio to further enhance its ability to comprehensively serve customers' digital journeys and drive the proportion of recurring revenue. More specifically, it continues to invest in the following five strategic growth areas:
SAP on Cloud
Companies with SAP-based ERP solutions are facing pressure to move these critical workloads to the cloud in order to ensure successful business continuity and differentiation. These critical workloads often represent some of the largest instances of business environments to be moved to and managed in the cloud, inherently encompassing a massive cloud and significant new software licensing spend.
SoftwareONE continues to further deepen its offerings in SAP cloud migration and next generation S/4HANA solutions, focusing on technology advisory, strategy and enablement of managed platform services. In addition, SoftwareONE helps customers create visibility and extract data intelligence through its monitoring solution service PowerConnect.
An increased focus on innovation is pushing customers to modernize existing applications and create new ones. SoftwareONE intends to continue expanding its capabilities globally, with a two-fold approach:
- Cloud-native application development: Building out customized cloud-native technologies and applications from scratch and ensuring these are managed and run efficiently in the cloud;
- Application modernization: Migrating existing applications to the cloud, optimizing them to efficiently leverage cloud technology on an ongoing basis.
Hyperscaler Factory / Cloud Services
SoftwareONE intends to expand its end-to-end capabilities on Microsoft Azure, AWS and GCP with its hyperscaler factory, which offers solid expertise in multi-cloud solutions, managed cloud compute optimization around costs and technology and real-time management, monitoring and automation with PyraCloud.
While migrating to the cloud may offer several advantages in terms of scalability and agility, it is often also associated with rising variable and opaque spend. For example, Flexera estimates that more than 30% of cloud spend is wasted.
At SoftwareONE, a team of 700 dedicated professionals, in combination with its FinOps–certified platform PyraCloud, provides customers with the transparency, predictability and governance needed for effective cloud financial management.
In 2021, Gartner named SoftwareONE a leader in their ‘Magic Quadrant for Software Asset Management (SAM) Managed Services’. According to Gartner, SoftwareONE has the highest total SAM–managed services revenue and client volume, making it a global market leader in SAM and SLM. SoftwareONE was also certified as the only FinOps Service Provider and Platform during the year.
 Flexera State of the Cloud Report (2021)
After successfully partnering with leaders in the construction, education and not-for-profit sectors, SoftwareONE intends to make further strategic investments in other industries which would benefit from higher technology adoption.
Scale global-local operating model for continued profitable growth
SoftwareONE has one of the broadest geographic footprints in the industry with local sales and service delivery capabilities, from which it serves its large customer base.
SoftwareONE plans to further leverage its lean and scalable global-local operating model to continue driving profitable growth. To this end, it intends to expand its regional service delivery centers to optimize resource utilization and talent acquisition across the organization. In addition, the group intends to continue driving the standardization, digitization and automation of processes across its global operations. To enhance customer experience, it also has plans to up-skill resources at its three global service delivery centers in Delhi, Mexico City and Leipzig.
As a result of its scalable operating model, SoftwareONE expects to benefit from scale economies and operating leverage as it continues to grow its Solutions & Services business line.
Global and local operating model to drive customer engagement and profitable growth
Pursue M&A opportunities
SoftwareONE has a strong track record of supplementing organic growth with M&A and intends to continue pursuing acquisition opportunities to acquire capabilities, talent and IP. Since its IPO in late 2019, it has completed 13 acquisitions focused on scale, geographic reach and capabilities. During 2021, SoftwareONE announced eight acquisitions, including HeleCloud, SynchroNet and Intelligence Partner in the AWS and GCP ecosystems, as well as a number of SAP services providers, including Centiq, SE16N, ITST, ITPC and Optimum to build out its 40-country presence and delivery capabilities.
Leveraging this experience, SoftwareONE has developed an effective model which allows entrepreneurs to continue building their businesses as part of the SoftwareONE group, while capturing integration and synergies on the back-end within a short period of time post-acquisition.