What’s the Outlook for the Production Print Software Market?
COVID-19 Moves the Market Down Over 5% in 2020
The COVID-19 pandemic is causing disruption in the global print production workflow market as supply chains are strained globally and print operations are interrupted locally. The initial wave of infections spurred many governments to enforce shelter-in-place measures that only allowed essential businesses to operate—leaving some print service providers to be deemed non-essential in all geographies. As restrictions eased, work procedures had to be modified for social distancing and remote work (where possible).
The coronavirus pandemic is unlike any other recent downturn since it requires not only an economic solution but, more importantly, a medical one. The consensus of economists and business leaders is that the global economy will experience a U-shape recovery that is highlighted by periods of forward progress and backward retreat depending upon the success of virus containment before medical treatments or a vaccine arrive. Look no further than the International Monetary Fund (IMF) as an example of the pandemic’s uncertainty. The organization projected a 3% drop in global GDP in April, then revised it to a 5% reduction in June.
Keypoint Intelligence sees a 5% drop in global revenues for the production print software market in 2020, followed by recovery in late 2021 (assuming the pandemic is well contained in the first half of the year). Software vendors of print production software have also responded to the new challenges by adapting to the needs of their customers. Some vendors offered additional temporary licensing for remote workers, while others have provided their solutions for free to any PSP as a limited time offer. All vendors have worked closely with their customers to offer forbearance or renegotiated payment terms on a case-by-case basis in hopes of a return to business as usual in the future.
The silver lining is that not all types of software or revenue streams will be impacted equally. Professional services and maintenance revenues are most at risk due to the inability to be on-site and overall cost cutting measures of PSPs. Subscriptions, however, are expected to outperform as PSPs continue to see value in scaling the solution as needed, while also having a predictable operating expense to maintain the latest technology.
We encourage PSPs, vendors, and the industry at-large to use this time wisely to prepare for the inevitable economic recovery and build resilience for the next disruptor. Both will occur; it is just a matter of when.