It is a well-known fact that Europe is home to thousands of nimble software companies.
A very large number of these companies stay small and many serve local or niche markets. Europeans have long envied the US for their ability to grow large companies, often believed to be due to a larger home market but also due to more efficient capital markets. Well, Europe is catching up quickly, and Papillon Software aims to become one of the leading European vertical software companies.
Focusing on vertical software has many benefits. Whereas horizontal software may enjoy a potentially larger market (“TAM”), vertical software companies can achieve a much higher share of their respective market. Vertical software is built for very specific purposes, and become business critical and completely embedded in the fabric of the industry.
What has changed? Many older business software packages are now ripe for replacement. Many industries and the respective companies, have obtained a higher degree of digital maturity, and are now looking for innovations from their vendors. Whereas older software packages are often very hard to integrate and customise due to the closed nature of the software, the modern software stack facilitates open ecosystems and rapid innovation. This will only accelerate.
As an example, AI, and not just generative AI, can quickly be adopted by new and modern software to unleash tremendous value to clients. Older software packages will suffer from lack of innovation. The older software packages may die slowly, but they will invariably be replaced.