Industry Insights

One Third of Inc. 500 Software Companies Have Marketplace Strategies

By Paul Arnautoff / Aug 30, 2015

Lte Marketplace Blog

Earlier this month, Inc. magazine released its prestigious Inc. 5000 list, an annual ranking of the fastest-growing companies in the United States. We’re thrilled that AppDirect made its debut at number 71, but that’s not the only reason we think this year’s list deserves a closer look.

We did some quick analysis and discovered a few interesting facts that point to just how fast the technology landscape in general—and the software industry in particular—are changing. Looking at the top 500 companies in the software category (not including AppDirect; we’re counted as a software company, but we’ve excluded ourselves from these numbers) we found that just over a third, 34 percent to be exact, participate in SaaS marketplaces, as either a product that is listed or sold by a third party, or as a marketplace operator.

Why is this significant? It shows that many SaaS companies are thinking beyond direct sales channels and are now shifting their strategies to become part of larger ecosystems of complementary products and services. For SaaS providers that want to grow fast, this type of indirect sales strategy is critical; a direct sales strategy is simply not enough to drive fast growth. As the Inc. 500 shows, turning to indirect sales is already proving to be a success for many ISVs.

We also found that 82 percent of Inc. 500 software companies describe their products, or their company as a whole, as a “platform.” This is more than just industry jargon; a platform is purpose-built for fast, iterative software development, and it’s the ideal setting for growth. Platforms give developers more leverage to build on top of and customize solutions, and they grow faster because their users find more ways to derive value from the software. In short, today’s fast-growing platforms are poised to be tomorrow’s leaders at the center of thriving software ecosystems.

The software companies on the Inc. 500 got there through smart planning and strategy, trial and error, and a lot of hard work. At AppDirect, we’re making that path easier with our new Monetization Suite. Used by Zendesk and other high-growth SaaS companies, the Monetization Suite is the first end-to-end solution for driving cloud software sales through easy access to billing and distribution, marketplace, and reseller services.

On September 15th, I’ll be hosting a webinar that will cover how the Suite works, as well as how developers can use it as a complete revenue engine for their products while driving down costs. You can click here to register for the 45-minute long presentation. I’ll be on hand for Q&A after the presentation, but if you have any questions in the meantime, don’t hesitate to let us know.

Paul Arnautoff is a Director of Business Development at AppDirect.