Study Cites Decline in New Software Startups Since 2009

By Darryl K. Taft  |  Posted 2015-07-21 Print this article Print
cloud startups

The rate at which new companies have started up in the last five years is significantly lower in North America than it was in the past, according to Evans Data.

Although the tech economy is currently booming, the number of software startups has declined over the last five years or so, according to a study by Evans Data.

The rate at which new companies have started up in the last five years is significantly lower in North America than it was in the past, according to Evans Data's Developer Population and Demographics study.

Evans Data based its study on population models and the results of its semi-annual Global Development Survey, which showed that in North America there are 328,000 developers working at companies less than 2 years old. There are 369,000 developers working at companies that are 2 to 5 years old, and 1,416,000 at companies that were started 5 to 10 years ago.  The total of those working at companies that were started since 2009 is 49 percent lower than those at companies started in the 5 years before 2009.

"We're obviously still seeing the effects of the great recession that started in 2008," Janel Garvin, CEO of Evans Data, said in a statement. "It's much less visible due to the excitement and growth around Silicon Valley, and the release of new technologies that capture everyone's imagination, but the reality is in the numbers.  The recovery has been very weak in real terms, and this shows in the large decrease in new software companies during the last five years."

The Spring 2015 Global Development and Demographic Study is the 20th edition of the series, which was started in 2006 and is published twice yearly. It estimates total worldwide developer populations and projects population data by region and country five years into the future. Population estimates are overlaid with data from Evans Data's biannual Global Development survey to provide population estimates on a variety of development topics, such as mobile development, development for the Internet of things (IoT), cloud, big data and other technical adoption trends, plus developer demographics by region and segment.

Last month, Evans Data noted that there are nearly 5 million developers worldwide that are using the cloud as a development platform, and a similar number expect to be using it in the next six months, based on a study by the research firm. The study, which used secondary research, proprietary population algorithms and survey data from Evans Data's Global Development survey, estimated that 4.9 million developers are currently using cloud computing, while 4.1 million have the expectation of using it in the next six months. An additional 5.2 million expect to use the cloud in the next 7 to 12 months or later, and 4.8 million said they have no plans at all for using the cloud.

"The cloud represents a sea change in the way that developers work," Garvin said. "Not only does it increase productivity and decrease cost, but it provides a level of flexibility unavailable before, which paves the way for new technology trends like IoT. That's why so many developers have embraced cloud as a development platform, and why so many more expect to do so in the future."

Among developers who are using the cloud today, the largest group are independent software vendors (ISVs), followed by developers who work on corporate software for use within their own companies. Those who work on software for sale to private clients, such as value-added resellers (VARs), systems integrators or consultants, have a somewhat smaller number of developers in the cloud than corporate developers do. While cloud development is rampant across all regions, the Asia-Pacific region has slightly more developers currently using cloud, while Latin America has the least but also has the most optimistic outlook for increase in use.



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