We will not touch upon the equipment market. the output on it is complex and costly, but for the software market it is worthwhile to talk a little more. The right choice of niche for entering this market is very important, because it can determine not only the amount of initial costs, but all further development of the company.
The IT market is very extensive – it includes suppliers of equipment (servers, personal computers, laptops, mobile devices), and manufacturers of a variety of software. At the same time, if the market for personal computers is shrinking, the mobile device market is growing.
And the software market has a direct relationship with the hardware market, respectively, desktop applications have long been in no demand, but the market for mobile applications and cloud services is gaining more and more momentum.
In general, it is possible to divide the software market into several conditional types by types of development:
- Global software – this includes operating systems, programming languages, server software used in data centers, etc. The development of such software products is very complex and has been performed for many years. In order to start a project of this scale, it is necessary to determine in advance its goals, the volume of investments and not to build illusions about making a profit. Moreover, there are many free analogs supported by the collective mind of the communities of enthusiastic programmers.
- Corporate IT systems – this includes a variety of ERP and CRM-systems, intranet forums and any other programs that provide shared access to files and data. Despite the abundance of box solutions, new products are constantly appearing (and are becoming successful enough), and custom development is in high demand, since not every company is equipped with a standard «boxed» functionality. The required amount of investments for the development of such a product is several orders of magnitude lower than in the case of global software, but the success and payback will depend on a number of parameters: accurate access to «your» client, advertising campaign, competitive prices, competitive advantages, .
- SaaS-services – by and large this is a kind of corporate systems, only with the implementation of «in the cloud», so for them all of the above is true;
- IT start-ups are a fresh trend in recent years. Most often this is a small group of enthusiasts, developing some kind of service, and counting on further investments. According to statistics, 9 out of 10 startups «die», so before choosing this particular niche, you need to study the market thoughtfully, evaluate risks, draw up a business plan and only then design and develop a service that will conquer the world;
- Custom development is the niche that we selected several years ago, and which continues to develop actively. The huge and undeniable advantage of this niche is that it requires a minimum of investments to enter the market, and also has the least risks in comparison with other types. This includes the development of sites, and the development of corporate systems, and the development of mobile applications on behalf of a third-party client, and all related services that can be provided as independent (support, support, consulting).
It is highly desirable that this interest be supported by some theoretical, or even better, practical knowledge about the development process, available tools and methodologies. Analyze the demand and the level of competition in the chosen niche can be based on data provided by rating agencies. Practically in every segment, even such highly specialized as the development of online stores, there are quite detailed ratings that compare flagship companies in terms of turnover, average check, the number of projects and other parameters giving a fairly clear picture.
Competition
Our niche is highly competitive only at first glance. In fact, this is the same level of competition as between BMW and AvtoVAZ – segmentation is primarily determined by the price of services and the class of customers. It’s no secret that the spread of prices for the same development of sites can be from 5 thousand to 5 million rubles. Everything depends on what you need to do, what level of quality to provide, what tools to use, how great a name the IT company has, how well-known customers in its portfolio are present.
In the end, if you work in a price range of 5 – 25 thousand rubles, companies with projects of 1 million rubles will clearly not be your competitors, and vice versa.
To get around competitors, you must first determine in which price segment you will provide services. Then it is worth analyzing direct competitors from the same price segment that provide the same services: see what development tools they offer, what additional services are put into the development cost, what customers and projects they work with.
At the same time, it is important to evaluate objectively your own forces – will you be able to ensure the quality is not worse? Can you offer similar services for the same price? Further it is important to single out your unique advantage in comparison with competitors: what is better? Why do customers need to work with you?
If this advantage is formulated on an intuitive level, without external confirmation, it is better to check it in advance: to interview the friends, acquaintances, casual interlocutors. Find out whether such an advantage is really important to them, or your hypothesis is untenable. The sample should be large enough to give the most accurate representation.
How to determine the range of services that the company will provide?
This depends, first of all, on your level of knowledge about the sphere and technologies, as well as on the level of initial investments. For example, the average salary of an experienced programmer on Symfony is 80-100 thousand rubles, i.е. 3 months of its work the companies will manage already in 240-300 thousand rubles. At the same time, projects of this level, as a rule, are complex, expensive, and require not only a programmer, but a full-fledged team: a designer, a tester, a project manager, an analyst, etc. It is highly desirable that at least one of the key competencies is available to the owner of the company, otherwise it will be difficult to control the processes.
The most common situation on the market is when an experienced developer opens his own company, and this is correct. He already has an understanding of what pitfalls he is waiting for, with what difficulties the company can face, how to properly build the processes.
If you plan to develop sites on one of the popular CMS, such as WordPress, Joomla and the like, everything becomes much easier. Requirements in skills and abilities in this case are sharply reduced, average salaries of developers are lowered to a level of 20-25 thousand rubles a month. Development can be put on stream, because one project is like the other.
If you plan to focus on design and creative component, the requirements for programmers will be small, but the requirements for designers will grow sharply.
Accordingly, the accompanying services in these three examples will be different. In the first case, this will be mandatory support for the project, its support, expansion of the functional – i.e. technological services for the further development of the project. In the second case, Yandex.Direct setup, the management of groups in social networks, SEO, i.e. promotion of the project. In the third case, additional services can be the concept of an advertising campaign, the development of corporate identity, promo and printing products.
It is important to remember: additional services are good, but only when they do not distract most of the company’s resources.
Sometimes it is more profitable to occupy a narrow niche than to offer customers the widest possible range of services.
Who is the main target audience?
If we talk in general about the IT services market, then the target audience is practically any business, without limitations.
But to determine the target audience of your company, you need to make the most accurate portrait of the client:
- how much money the client is willing to spend on your services;
- What is the main service he needs?
- what additional services it may require;
- if you have a regional binding, most of the companies from another region will most likely be excluded from the target audience;
- in which area does your client work (often customers choose a developer who has projects in the portfolio for the same industry);
- (if you work mainly with small business, it is usually the owners, if you work with the enterprises are middle managers, and they have a completely different level of motivation to start the development and finish the project quickly );
- are there any requirements for the tools used in the development (some customers as a basic requirement indicate what the development should be done, for example, what programming language should be used, which graphics editor, which CMS).
Beginners should remember that reaching out to large customers without prior preparation is a very difficult task. Our target audience immediately became medium business, which needs some kind of non-standard solution for process automation.
The thing is that in this segment the products are complex, they require escort. Moreover, they rely on business processes, and this is a flexible thing, and over time it changes. Therefore, the product usually evolves with the company.
Investment size
Often an IT company starts with a single developer. In this case, the initial investment – a table, chair, laptop and the Internet, that is, in total – no more than 15 thousand rubles.
With a more serious approach, the initial investment is:
- registration of the company – 4 thousand rubles of state duty, 10 thousand rubles – authorized capital, another 5-10 thousand rubles for registration, if you do not want to do it yourself. For FE, the cost of registration is limited to the payment of a state duty of 2 thousand rubles;
- office rent – 20-50 thousand rubles, depending on location and footage;
- a virtual automatic telephone exchange – 2-3 thousand rubles a month;
- the development of your own website is rather an investment of time or resources of your company; conditionally it can be considered about 30-40 thousand rubles;
- domain and hosting – 2-5 thousand rubles a year;
- advertising costs – from 5 thousand rubles a month;
- salary for employees – from 100 thousand rubles a month;
- equipment (server, computers, multifunction devices, other office equipment) – 70-100 thousand rubles at a time + 2-3 thousand rubles monthly.
