Traditionally, organisations turned to larger IT companies for software development services. They chose these vendors because they believed larger vendors would provide a ‘safer’ option. However, organisations from government departments to big businesses are beginning to engage with smaller vendors.
In the past, larger IT companies were seen as less risky to deliver the essential software systems that power modern organisations. Smaller vendors were often overlooked particularly by big businesses and government departments.
“In the past, there were a handful of large IT companies that owned the majority of market share for software development. These days, there are many smaller IT companies in the software development industry and they are slowly claiming market share from the big guys,” commented Kareem Tawansi, CEO of software development provider, Solentive Software.
Why is this happening? According to Tawansi, “Organisations from government departments to big businesses are starting to understand that smaller organisations have the capability to be more agile and offer better value for money than the larger global IT companies.”
“These large global IT companies are often bigger than their clients and have leverage that they can use against them. This automatically puts clients in a position of negative leverage based on size alone,” explained Tawansi.
In comparison, smaller software vendors focus on developing long-term sustainable relationships with their clients, rather than use leverage over their clients. Today, organisations are starting to realise that smaller vendors are in a better position to become a technology partner rather than just a provider.
Advantages of smaller software development providers include:
- Less overhead costs being passed on to the client – larger organisations have many levels of administration and management
- Lower turnover and churn rates within smaller vendors means the developers that have intimate knowledge of the client’s system are involved in the development from inception to deployment
- Flexibility in meeting the client’s needs – flatter management structures and smaller teams allow smaller vendors to respond to changing business needs faster
“Smaller software vendors are in a better position to not only be a preferred vendor for software development, but also a technology partner to the client. Being smaller and more flexible, they are able to modify processes quickly in order to accommodate the needs of their clients,” concluded Tawansi.