Most software companies realize that internationalization must be a core element of their business strategy.  The software company who is only active domestically will sooner or later be exposed to strong competition from international competitors moving into his territory. A software company with only local market penetration will always have a very limited market value. But when is it the right time to make the move?We often get one of the following questions from potential clients: “Are we ready for internationalization?” or “How do we know if we are ready for internationalization?” Hints to how you can win the first clients in a new geography are included in this TBK Blog posts: The Bridgehead

The answers and more questions?
Making the first moves outside the borders of your domestic market is probably a challenge of equal magnitude to when you started the business in the first place. Based on our experience with more than 100 international GTM projects we can confirm that the move is risky, costly and filled with unforeseen issues. If you ask any of the two questions: “Are we ready for internationalization?” or “How do we know if we are ready for internationalization?” – Well, then you have probably not been through the planning process yet. In that case the answer to the first question is ‘no’. ‘When you have a strategy, a plan and the resources to execute the plan’ is the answer to the second question. So what are the challenges and what type of planning is required for successful internationalization?

Challenges
Internationalization in the software industry is not about selling a little here and there. It is about becoming the global leader in your market segment. You may ask if this is really necessary. Yes it is! Because, how do you explain to potential customers, potential employees, potential resellers, potential investors and the press that your ambition is to be number 73, 12 or 7 or 5? Will this attitude get you the best and most ambitious employees, resellers or customers?
“The winner takes all” also applies in the software industry. So you either go for the gold or you go somewhere else!
Becoming a global leader means operating ”over distances”.  You must enable people in remote places, speaking different languages, living in different time zones and operating on a different cultural basis to execute your strategy. You must enable them to make all those tiny micro decisions and actions that will eventually make your vision come true.
This is your challenge. Now what is your plan?

The Plan
There is no “one way”.
Our experience shows that there is no single formula for international leadership. You will have to find your own formula.
However,  you always need a strategy and a plan.
The plan must be ambitious, but it should allow for taking small controllable steps where you can adjust and correct when reality does not match your expectations.
The TBK Blog post The Bridgehead gives some hints to how to make the first moves.

The strategy review
An ambitious software company preparing for internationalization will never ask one of the two questions mentioned above.  They will ask hundreds of other questions associated with the strategy and the plan, and they will execute when they feel comfortable with the plan. One way of checking your current position and your level of readiness is to perform a ValuePerform strategy review. The ValuePerform review will show if your strategy is consistent, if you management priorities are aligned with the strategy, if your management team is aligned with the strategy  and where you need to improve in order to pull your strategy through.

This text was co-written with Gregor Bossert and first appeared as a TBK Newsletter (TNN) article in September 2008