We have purchased three software businesses so far this year. With two we continue to support these software packages while with the third we have digested the technology for another project.
Over the last month owners of two more software companies looking to sell their respective businesses have approached us.
Like any business, scale is vital to the financial health of a software company. To maintain and enhance software developed for a specific marketplace you need between 300 and 500 active customers. The exact break even number depends on the investment to maintain relevant software.
The two most recent offers put our way are from businesses with user numbers below the benchmark. With significant changes ahead they can’t fund what would be necessary to be relevant.
While we respect that small business owners like to deal with small businesses, that is not practical when it comes to IT where significant investment in product development each year is vital.