Trendwatch Software: The Software Sector in Transition
Contents
(in German language)
- Digitalization as a Structural Driver of Market Transformation in the Software Sector
- Technologies and Transformation
- M&A Activity in the Software Sector
- From Deal Volume to Quality Selection—The New Reality of M&A in the Software Sector
- Transfer Partners Valuation Framework
Transfer Partners Research, in collaboration with Senior Advisor Prof. Dr. Jochen Mackert, has published a research paper on digitalization and new technologies as structural drivers of market transformation and the resulting new M&A landscape in the software sector.
The German economy is under significant pressure to undergo structural transformation, particularly in the area of digitalization. Shortcomings in digital skills, IT infrastructure, and process digitalization, as well as increasing regulatory and technological requirements, are significantly driving up the demand for external software solutions. At the same time, a shortage of skilled workers and the increasing complexity of modern IT systems are driving up demand for specialized software providers. This creates attractive growth and consolidation opportunities for software companies, particularly in the German market—which is dominated by small and medium-sized enterprises (SMEs)—and which is a major focus of investors and M&A activity. Accordingly, the software sector in Germany continues to be one of the most active markets for M&A transactions in the mid-cap segment. The central question remains: Which overarching developments and technological trends will shape the future dynamics of the software market, and how will new valuation frameworks emerge from them?
Together with our Senior Advisor, Prof. Dr. Jochen Mackert (DHBW Karlsruhe), an expert in digital transformation, our research team has identified key future drivers that will significantly influence the development of the software industry as well as future scaling and valuation models. These future drivers are analyzed in detail in the research paper “Trendwatch Software: The Software Sector in Transformation.” In line with this, we present the Transfer Partners Valuation Framework—a multidimensional valuation framework that enables the structured evaluation of software companies based on key criteria such as market scope, tech layer, revenue model, customer segment, and functional category. The goal is to make the valuation of software companies more transparent and to better assess long-term competitive advantages.
The Transfer Partners research paper “Trendwatch Software: The Software Sector in Transition” is now available in German language as a PDF download.