2020 Software Report
Gain an understanding of the business of software. This report provides comprehensive analysis of the business of software, including benchmarks for 132 public software companies. It provides key insights, overall industry view, operational analysis, historical analysis, IPO analysis, and market cap analysis.
What is a Control Tower?
Gain an understanding of one of the hottest, yet misunderstood, topics in supply chain management in recent years. This white paper delivers an analysis of the foundational concepts and principles of control towers and how control towers add value to supply chains.
We believe in the power of software to transform supply chains
This transformation will come in the form of personalized supply chains of one, as business and the world are increasingly defined by economies of scope versus economies of scale. Will every company become a software company? No, but software will become an increasing part of every company's asset portfolio. The percentage of software assets to overall assets deployed for business usage will increase, meaning software will replace physical assets.
The Worldlocity Software 100 Market Cap Index
The Worldlocity Software 100 Market Cap Index (WSI100) tracks the average multiple of market capitalization to trailing-twelve-months revenue for the largest public software companies that trade on US exchanges. The index currently includes 132 software companies. The index closed out 2020 at 13.9, which represented a 62% increase for the year. The index continued to increase in the beginning of 2021, but has since fallen back. As of March 26, 2021, the index stood at 12.1; this represents a 13% decline YTD.
The World as a Supply Chain
Supply chains are critical to advancing companies, societies, and the world overall. Simple statistics show how the world is performing as a supply chain. This is useful not just for absolute analysis but as a reference point against individual companies and countries.
How Does Amazon Do It?
Amazon is the retail juggernaut of our day. Its supply chain prowess has catapulted it into the masters category of Gartner's top 25 supply chain rankings and fueled its growth towards a $200B company. Most people know Amazon has run a high-growth, nearly-zero-profit business model for more than twenty years, and has been rewarded for doing so by both customers and investors. It is also known that certain parts of its business are low margin and certain parts high margin. In some ways, it's a tale of two companies, albeit two that depend heavily on each other. What does its value chain look like?
Is Software Eating the World?
Over the past two decades, software has slowly but steadily been replacing physical assets throughout the supply chain. Marc Andreesen popularized this concept more than a decade in his then provocative discussion. It turns out that this is not just a thesis, but there is actual data to support it. The current trajectory shows that software is replacing approximately five to seven percentage points of physical assets per decade.