How can software engineering companies differentiate themselves

How does a creative company differentiate itself in a seemingly saturated market? By packaging its product to a niche market.

My specialty is helping software companies expand internationally. I frequently get approached by off-shore companies with application development capacity asking us to establish a partner channel for them and/or find new clients with projects. My first question to them is, “How do you differentiate from the 10s or even 100s of application development companies already in the local market?”

Unfortunately, too often, the answer is “we are cheaper”.  This only begs the follow up question, “Cheaper than the 50,000 person company in Asia or the 15 person company in Latin America or the-hungry-for-work company in Eastern Europe?”

Price is not a great differentiator, but value is.

As Windows 8 is a relatively new product, user experience and digital devices application development for this operating system is really popular. But how does a creative company demonstrate its talent to potential partners and customers who only see them as manpower for hire?

The answer is packaging.

By packaging a digital application that solves a particular problem for customers or enables them to do businesses in new ways, developers can demonstrate immediate benefits and applicability to specific customer types. Potential partners can also see who the target customers are and how to articulate the benefits. For example, if a digital developer packages a solution for putting airplane boarding passes on smart phones, then it is immediately clear to potential partners that airlines are their target customers. The airlines can see the benefits of being able to give passengers real time flight status updates, availability of seat upgrades, etc… In comparison, by not packaging a solution, the message would be: “we have great digital developers, do you have a need for any?”

The other consideration is, unlike individual projects, packaged solutions can be sold repeatedly.  Each time the packaged solution has a pull through effect on more services. Over time the developer becomes an ISV whose Intellectual Property increases in value as they add more features and win more clients.