Small software firms won big in 2010 with more than 50 percent revenue growth, while mid-sized vendors grew 26 percent, according to a new study by SIIA and its partner OPEXEngine. The findings were announced today at SIIA’s Midmarket Growth Conference in New York, NY.
The study, which took the pulse of software companies with up to $350 million in revenues, found that this segment of the industry is at the forefront of the economic recovery. The 2011 Software Benchmarking Industry Report shows that firms are emerging from the recession and achieving healthy revenue growth after focusing on cost containment for the past few years.
Based on the study, SIIA anticipates further growth as companies continue to expand their customer bases and take advantage of the latest technology to support sales and marketing efforts.
Key findings from the 2011 Software Benchmarking Industry Report include:
* In 2010, private software firms achieved a revenue growth median of 28 percent over 2009, and spent an average of 47 percent of their revenue on sales and marketing efforts.
* Mid-sized public software firms spent an average of 30 percent of their revenue on sales and marketing efforts—achieving a median of 22 percent revenue growth in 2010 over 2009;
* The top 10 percent most profitable mid-sized software firms increased operating income by a median of 14.2 percent and median of 19.4 percent of EBITDA in 2010;
* 71 percent of firms surveyed expect revenue to grow between 20 and 50 percent in 2011, while 10 percent expect revenue growth of more than 50 percent.
The 2011 Software Benchmarking Industry Report provides extensive financial and operating metrics for companies ranging from start-ups, to those with revenues of up to $350 million. Benchmarks cover key financials, including detailed expense ratios, revenue and profit metrics, geographic break-outs, employee statistics, as well as customer and sales model comparisons. The report also looks specifically at Software as a Service (SaaS) vendors and breaks out all the benchmarks for smaller, private SaaS companies as well as for larger, public, SaaS companies. The 2011 report is the fifth annual benchmarking of the software industry conducted by OPEXEngine, the leading aggregator of financial and operating benchmarks for small and mid-sized software companies.