PwC Top 30 Emerging Markets Software Companies

Established software companies in mature markets now face true competition, as well as partnership opportunities, in markets across the globe. PwC’s new ranking, Emerging Markets Top 30 Software Companies, identifies intriguing characteristics, common advantages and disadvantages, and signs for success among software companies based in emerging markets. Through the research, conducted with International Data Corp., PwC developed a snapshot of how successful software companies in emerging markets gain traction—growing from regional vendors into global players.

“Most of the companies in our ranking have built their businesses on regional strengths and local needs—for instance, security software in Eastern Europe and ERP software in Asia,“ said Raman Chitkara, PwC’s Global Technology Industry Leader. “It remains clear, however, that major software vendors in the developed world will maintain influence and power.“ Bolstering this point, the 30 companies on PwC’s list represent a mere 1.4% of global software industry revenues, and have revenues equal to 1.9% of the Global 100 Software Leaders revenues.

Most of the companies on this list are more than 10 years old and they’ve been working toward this success for a while. They’ve achieved it through cost advantages, and by tapping regional strengths. They’ve done it the way companies have become successful for years—they started small and became incrementally bigger and stronger. Two-thirds of the Emerging Markets Top 30 Software Companies are located in Asia; China alone comprises more than 40% of the total (13). Eastern Europe, including Russia, represents almost a third with nine companies, and Brazil has one company on the list.

Dominating the ranking, Asia-Pacific is characterised by the dual advantage of low-cost developers and an expanding market. This region not only focuses strongly on technology, but it also has the ability to leapfrog legacy technologies. Given the prevalence of manufacturing in Asia, it stands to reason that most Chinese companies on the list develop software relating to manufacturing or logistics. A specialised grounding in the intricacies of each local market is a critical element of success. This is a core part of the foundation that ultimately enables these companies to go global.

The strength of emerging markets in part derives from their burgeoning millennial populations, most of which feel more comfortable with mobile devices, and many of whom might never have owned a personal computer. These consumers represent significant market opportunities.

All is not rosy, however, as the advantages face counterweight disadvantages, and emerging-market software companies’ odds for success are not high, for several reasons. Although the Top 30 have proven their staying power, many must still answer whether they can effectively scale. Given that developed countries tend to default to names they know and companies they trust, emerging-market companies may suffer from lack of visibility and brand awareness. Other issues, largely economic and financial, can also plague these companies. Access to capital, ability to hold onto talent and lack of a meaningful global presence, are common challenges.

Mark Jansen, PwC Singapore’s Technology, Media and Telecommunications Leader, notes that in five years, the software world is likely to witness significant changes. Winners will become prominent, regardless of their country of origin. Enterprises will continue to look for cheaper, more reliable software—sometimes even without it being rich with features. “As OEMs from developing countries become bigger global players, they will likely consider options their counterparts in the developed world may not have considered,“ noted Jansen.