Lack of International Network is a Problem in the German Software Industry

Posted August 7, 2013

In Building Successful Partner Channels, Industry News

Lack of international network is a problem

A recent study in Germany concluded that there is there is a significant relationship between global growth in the German software industry and the nature of the personal network of the owners and the executive management.

The study is a part of the research project called “German Software Champions,” which is a scientific cooperation between the German Federal Ministry of Education and Research (BMBF), the Institute for Information, Organization and Management (IOM), the Institute for Computer Science and New Media (WIM) and the Center for Digital Technology and Management (CDTM).

We wrote a summary of the conclusions from the ”German Software Champions” research project presented at the “Parlamentarischen Abend” in Berlin, June 5th this year.

Germany is the second largest software market in the world. $79,4B was spent on software and related services in Germany in 2012.

In spite of this huge domestic market, Germany doesn’t foster many global software brands.

Out of the 250 biggest ICT companies in the world, only 6 are from Germany. Out of the top 50 biggest Internet companies in the world, only 4 are from Germany.

Germany represents 5,67% of world demand for software and software related services. While this is a very lucrative domestic market for the local German software vendors, it is not enough for growing to a size that can withstand global competition. 94,33% of the global market for software and software related services remains OUTSIDE Germany!

The Network is a Problem in the German Software Industry

During the research project, a large number of German soft-driven companies were asked this question:

“Do you miss the necessary contacts abroad required for internationalization or increased internationalization?”

They could answer NO (trifft nicht zu), YES (trifft zu) or NEITHER/NOR (weder noch)

The respondents were divided into two groups:

Companies already operating internationally
Companies who do not operate internationally

The research concludes that there is a significant correlation between international growth and the access to a network of people outside Germany.

German software executives do not have sufficient personal international contacts and that is hampering their international growth!

XING is a problem for the German software industry

Have you heard about XING? If you do business in Germany and try to connect with your German contacts on LinkedIn you will notice that only very few have an active profile. If you ask them why, they will respond “Oh, but I use XING.” XING is really great if you want to do business in Germany.

Most German business people are on XING. Unfortunately XING is not the place most people on this globe go to look for skills, experience, people and companies. LinkedIn is.

LinkedIn versus XING

I did an advanced search on Linkedin for CEO’s in the category “Computer Software” with companies that have more than 10 employees. Here are the results:

You will notice that German CEOs are dramatically underrepresented in this search. Israel with just 0,36% of the global market for software related products and services showed 525 CEOs in this search, while Germany with 5,67% of the market only showed 327. Now Israel is known to be one of the hot-spots for entrepreneurship in the world, but compared to Sweden, Finland and Denmark, Germany grossly underrepresented.

If you make a similar search on XING you will find 1.971 software CEO’s in Germany. If you do the same search on XING with the job title “Geschäftsführer” (CEO in German) you get >10.000 hits. Repeat the software CEO search on XING for Israel (148 hits), Finland (39), Sweden (79) and Denmark (57).

The owners and the executives in the German software industry do not share networks with their international colleagues.

If you use LinkedIn to search for competence, skills, people and companies the probability that you will find a German is very small. It seems as if the average German software executive hasn’t figured out what social media is about.

Social media is about being found!

[important]You maintain a social media profile so that people can find you and your company when they search for the things that you offer. You have to have a solid “findable” profile where most people do the most searches. You cannot afford to ignore LinkedIn.[/important]

No Danish software CEO would make a profile on a social media platform that is mainly used by other Danes and use his local title “Adm. Direktør” but this is exactly what the German software CEO does.

Changing the mindset of CEO’s is probably one of the toughest jobs in the world. If Germany wants a fair share of the global software market we must conclude that they have a “Big Hairy Audacious Challenge” on their hand. They have to change the mindset of the German software CEO.

While they struggle with that the world outside Germany keeps turning.