4 Business Risks that Should Be Keeping ISVs Up at Night

Employee retention, cybersecurity, the legislative landscape, and new technologies deserve some extra attention and a proactive strategy.

Software companies face the same business risks that other companies face. Natural disasters can stop operations, and human error can diminish product quality and, perhaps, brand reputation. Or, the world’s economy can change; you’re seeing the impact the coronavirus and Brexit are having around the world.

Software development companies, however, have a unique set of business risks to keep their owners and managers up at night. Put up your defenses and develop contingency plans in case these risks become more than what-ifs for your business.

1Employee Poaching

The U.S. Bureau of Labor Statistics is predicting that computer and IT jobs will grow at a rate of 12 percent from 2018 to 2028, adding about 546,200 new jobs. Furthermore, staffing agency Robert Half reports that 86 percent of employees say it’s currently a challenge to find IT professionals.

Some recruiters routinely look for people with the skills they need by browsing through the org charts of other companies. This shouldn’t come as a surprise, but it may become even more common as people look for a golden goose that can help them capitalize on a booming economy.

It’s time to look at salary and benefits, advancement opportunities, your company culture, and whether your employees consider work at your company challenging and an opportunity to showcase their skills. Build an employee retention plan that enables you to protect your business when other opportunities come calling.


We’re all trying to work more efficiently and effectively — and hackers are no exception. A Glasswall Threat Intelligence Bulletin from 2019 reports that technology is a prime target for hackers, and software developers are the most targeted role. Glasswall explains that phishing targeting developers can result in access to IP — and loss in revenue for your company.

Also, Software as a Service companies take note: According to the Antiphishing Working Group’s Q1 2019 report, phishing attacks on SaaS and webmail services exceeded payment services for the first time last year.

To minimize business risks, make sure you have strong cybersecurity technologies in place, use multifactor authorization, and train your employees to recognize — and not fall for — attack schemes.

3Legislative changes

The past few years have brought the European Union’s General Data Protection Regulation (GDPR), the California Consumer Protection Act (CCPA), and a mixed bag of proposed and enacted state consumer data protection regulations.

Legislators seem to be leaning toward consumer rights, giving them control of their data, how it is used and whether it should be stored or deleted. If your software collects data on users, it could become noncompliant or obsolete with the passage of a new law.

There is also, as a Venture Beat article points out, a movement in the U.S. to hold software developers liable for inadequately protecting data from theft and exploitation.

Keep a weather eye on Washington and state governments to help guide your decision making.

4Writing Innovation Off as Hype

Google an emerging technology and the word “hype,” and you’ll find ample examples of people’s impatience with the speed of tech development and adoption. Where are the artificial intelligence (AI) solutions that are supposed to be automating processes? Where are self-driving cars? Why aren’t drones replacing delivery services? Shouldn’t 3D printers be printing replacement organs for transplant by now?

Bear in mind, though, that people asked those same types of questions about laptops, the internet, and digital wallets.

New technologies can pose a couple of business risks. One is if you embrace them without ensuring your team is properly trained and skilled, which will doom your projects to fail. But another substantial, maybe more dangerous risk is discounting the impact they could have on your market.

No One Said It Would Be Easy

Managing a software company in an industry where disruption and the demand for adaptation are common requires that you evaluate business risks and find ways to mitigate them. A proactive, rather than a reactive, approach is always better to ward off threats, rather than dealing with the outfall after negative situations arise. How will you move forward in a risky world?

Mike Monocello

The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of DevPro Journal.

Mike Monocello

The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of DevPro Journal.