Why Software Providers Should Move Away From ‘Drop-Down Industry’ Products


In the software boom of the 90s, we saw tech giants like Oracle and Microsoft successfully build software solutions that spanned industries. While this business strategy allowed the companies to capitalize on various markets, it left consumers with one size that did not fit all, neglecting their unique needs.

Thirty years later, companies are still developing software in the same way. I regularly see vendors’ websites with a “drop-down industry” navigation button with a drop-down menu that features a dozen industries ranging from pharmaceutical to aerospace. While general-purpose software means more revenue opportunities for expansion into new verticals, it also means more opportunity to be average, and average is no longer good enough.

As former NBA star Bill Walton is often quoted: “You don’t win championships by just being normal, by just being average.” The same goes for creating a winning software business. From my time founding a genetic pedigree-software company to my time now as CEO of a quality management software platform, I believe moving away from general-purpose options can benefit software vendors and their customers, as well.

Customization can come back to haunt your customers.

When a software vendor is building a general-purpose product, it ends up with the lowest common denominator because it has to play in all industries and a general-purpose platform calls for customization to create something meaningful for a specific industry.

If we bought cars like we buy software, the car would end up in our driveway in a giant box full of parts. We’d need a team of consultants to help build it. We could build a bus, race car, minivan or whatever we wanted. But we’d likely end up with something that looked like a race car and minivan hybrid, which probably wouldn’t meet our needs.

If there was a purpose-built solution architected for your unique needs, why suffer the customization and configuration step? Once your customization is in place, even the smallest update can break what you have built. This may be acceptable in low-impact environments, but in high-stakes industries where low-quality products mean the risks are great, general-purpose software vendors add significant unnecessary risk to customers.

Communities build up around industry cloud players.

When software is built for a specific industry and use case the subject matter expertise is invaluable in building a high-quality product with industry intelligence and workflows. Because of their specificity, communities build up around purpose-built solutions to form a full ecosystem dedicated to that industry. Because these solutions have a very specific audience in mind, they can find other solutions and organizations targeting common customers to build partnerships with and grow the ecosystem.

Talent is attracted to industry cloud players.

If you’re playing in a single industry, that means you better be really good at what you do — and when you are, the best and brightest talent is attracted to your mission and elevated standards. When you’re aiming for the highest-quality outcomes, the highest-quality talent is attracted. This creates a different experience for your customers and team. Because of our focus on quality, we hire experts — former quality leaders, engineers, designers and product managers — to staff our customer success teams; when clients reach out with questions and issues, they know they are getting both the customer service and industry expertise they need for quality outcomes.

The good news is that I’m seeing a shift in the way that modern companies build software. In 28 years of building software companies, I’ve witnessed the transition from on-premise general-purpose software to “industry cloud.” Companies implementing industry-specific solutions are coming out on top. They’re working smarter to avoid expensive customizations, long implementations, and cumbersome workflows.

How To Avoid Being A ‘Drop-Down’ Provider

If you’re in a leadership role at a software company looking to make an industry-specific shift, I encourage you to start by looking at where and how your teams are spending their time. Are they driving value for the organization through product improvements and innovation? Conversely, are they stuck patching and fixing custom codebases and implementations?

Once you’ve made the transition internally, shift your focus to your customers. Are you empowering your customers to deliver their best work? Are you driving quality outcomes for your end-users?

To make the shift consider the following best practices:

• Identify a singular vertical in which you can have the greatest impact and focus your efforts, including development, sales and marketing, on that use case.

• Reduce load on your engineering team by reducing the number of supported codebases due to industry-specific customizations and use cases.

• Help foster a community by publishing actionable blog content, speaking at conferences and offering outstanding customer service; building a community helps develop loyalty and buy-in from users.

Industry-specific cloud software offers the best of both worlds: software optimized for your customer’s needs with reduced strain on your development team. Without this eagle-eyed focus on both, your employees and customers will find their solution elsewhere. Make some serious changes before your employees and customers do.