The battle for talent
There is a big focus on hiring local resources, but finding qualified candidates is the biggest barrier to growth, especially when it comes to hiring software developers.
“We’re getting anywhere from 40 to 70 applicants per role advertised,” said the general manager of a cyber-security provider based in Melbourne. “Generally though, there are only a few people with ‘great’ talent who have applied.”
More than 57 percent of respondents said that over‑stretched resourcing was their biggest constraint to growth. Finding the right people remained a higher priority than securing the right funding or finding new customers to work with.
Looking offshore was the only solution for the founder of one IT security startup based in Melbourne, who told us: “We have a lack of experienced developers in Australia, and we’re always sponsoring someone to stay here.”
ISVs continue to use traditional approaches to finding new staff. Staff referral was by far the most dominant course of action, with 82 percent of respondents saying this was a way to find the best staff. In a distant second place was LinkedIn, at 35 percent.
Seek and recruitment agencies only received the tick of approval from fewer than 25 percent of respondents.
While creating access to homegrown talent might solve their biggest business challenge, there was limited investment – and in some cases, none at all – in graduate recruitment programs.
“Hiring engineers has become a constant job for startups,” said the CEO of a Sydney-based compliance and safety software vendor. “We tend to hire as soon as we find a fit rather than wait until we have a position as it is impossible to fill reactively.”
Customers and vendors
These ISVs had a heavy focus on growth in their domestic market. When asked of their top priorities for the year ahead, 64 percent said they wanted to grow Australian customers.
They were also ambitious to expand their international operations – 52 percent of respondents wanted to grow internationally (this mirrored data from a third-party report, the 2016 Startup Muster Survey, which said that 52.3 percent were looking to expand outside of Australia).
Rounding out the top three priorities for the year ahead was “Find new routes to market for our products”, which was a priority for 48 percent of respondents.
Some 79 percent were focused on B2B markets, only 5 percent on B2C and the balance focused on both sectors.
Software companies focused on B2B markets need to grow their international reach and effectiveness, because customers demand more tailored solutions to adapt to the requirements of their country.
The channel is the way to achieve this, and many of our respondents were looking to grow their business through strategic partnerships and reseller networks in the next 12-to-24 months.
This takes time and capital to implement effectively, and ISVs have the appetite to make this investment.
There are plenty of great examples of ISVs doing this well, with those investing in overseas networks enjoying growth faster than their domestic market.
Among our ISVs, the largest slice of revenue currently comes through direct business, both face-to-face and online.
Looking ahead to the next two years, the biggest change in routes to market will be the growth of online channels and alliance partnerships.
Public cloud partnerships were dominated by Amazon Web Services and Microsoft; some 55 percent of respondents said that AWS underpinned their technology, and 34 percent pointed to Microsoft Azure.
Honourable mentions included Salesforce and Google.
Although AWS was a more common public cloud layer than Azure, a greater number of respondents told us that Microsoft was their top alliance partner.
SPONSORED BY INGRAM MICRO AND MICROSOFT
"The Ingram Micro and CRN research outlines the opportunity for software developers to solve their skills gap and accelerate their revenue in the Australian market. The power of scale driven through Ingram Micro is a compelling proposition for any business and Microsoft is proud to partner with the Ingram team to spur the next generation
of Australia’s world-beating technology companies.”
Steven Miller Group Director - SMB, Microsoft
Methodology
Research conducted by CRN and sponsored by Ingram Micro Australia and Microsoft. Analysis based on responses from 116 Australian independent software vendors that took part in our survey, which ran online during April and May 2017. CRN filtered out any responses from non-ISV companies that took part.
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
