In 2011, Forbes famously declared that “every company is a software company.” Why? Because software makes every product, service, and transaction more accessible, efficient, measurable, transparent, and scalable, regardless of whether the company is fundamentally software-based. As a result, the demand for effective software is skyrocketing.
As the owner of a software development company, I have directly benefitted from this growing demand. However, when I step back and assess the state of the industry, it’s clear we are not fully prepared to meet the current needs, let alone those of tomorrow. This is due to two significant challenges.
1. The Complexity and Cost of Building Software
Developing good software is inherently complex and expensive. A new project requires the coordinated efforts of entire teams—analysts, architects, project managers, designers, developers, testers, and more. Additionally, there are marketers and business development professionals who bring in new clients. While new rapid development frameworks are emerging every day, they are contributing to a hyper-fragmented labor market, increasing training costs and causing customer confusion.
2. The Agency Delivery Model
The second, often overlooked challenge is the traditional agency-based delivery model itself. Agencies—ranging from small to large firms—build software solutions for clients (like my company, Prospus). Yet, clients typically approach us with four primary anxieties:
- They don’t really know what they want.
- They don’t know how much it will cost.
- They are hesitant to spend money to figure out what they want.
- They aren’t sure if we are capable.
While agencies excel at sharing their credentials, we rarely address these critical client anxieties. We won’t analyze a client’s needs until they’ve paid us, and we won’t provide an estimate until they’ve paid us even more.
The Path Forward: The New Agency Model
Given the hyper-fragmentation of the labor market and the limitations of the current agency model, how can we meet the growing demand for software solutions? Many are placing their bets on the citizen coder movement—the emergence of tools that allow non-programmers to build software without needing agencies (as suggested by the Quartz article, In the future, everyone will be a software engineer). While this may eventually happen, I believe the future will first see the rise of a new type of agency that addresses the aforementioned challenges in the following ways:
- Low-Burden Engagement – The successful agency of tomorrow will reduce the burden on clients by helping them visualize their solution without requiring an upfront financial commitment. This approach delivers value, demonstrates competence, and reduces cost-related anxiety simultaneously.
- Rapid Development – The successful agency of tomorrow will adopt development frameworks that reduce labor inputs, allowing for quicker delivery and lower overall costs.
- Transparent Costing – The successful agency of tomorrow will utilize frameworks and methods that generate predictable cost structures. This transparency will ease client anxieties and reduce risks for both the client and the agency.
Conclusion: Winning the Future
Agencies that incorporate these three features—low-burden engagement, rapid development, and transparent costing—will consistently win bids over traditional agencies. The near-term future of software development belongs to those who can address and alleviate these long-standing client anxieties.
…