Ipswitch Blog

Sinking Dollar Can Mean Rising Software Sales Overseas

| November 19, 2007 | Uncategorized

As Americans, we rarely live without the goods and services we desire. For years, we have heard experts like Alan Greenspan warn that when countries outside of the United States see rapid growing living standards; their currencies will appreciate against ours in parallel. For those of you who are Warren Buffet fans, he was right again. In 2002, Buffet began to purchase foreign currencies, betting on their appreciation versus the dollar. Even a wealthy country like the United States will eventually run out of steam after its citizens spend excessive dollars on foreign produced goods.

Further, once countries like China acquire dollars though the $700 billion US trade deficit, they will begin to dump the dollars once they suspect its valuation is in jeopardy. A country like China, which holds over $1 trillion dollars, has great power in the interconnected global economy, if it begins dumping dollars in favor of Euros thus pushing the dollar to lower levels.

For lots of software companies, the weakening dollar and weakening economy will lead to headaches in meeting growth and profitability objectives. Ironically, these companies tend to be US market centric with a bias or mis-understanding of what being a global company means. In contrast, international software companies find unseen benefits in dark clouds and the current economic status is a perfect example. Global markets offer growth, risk mitigation and excitement but you need to choose wisely. For example, it is unlikely a market like Australia with a population of 20 million people will balance a slowed US economy entirely but it is probable that a select list markets will offer opportunity to supplement the decline in US markets.

Further, being global does not mean you need local representation in every country though that decision is highly dependent on product characteristics like price, complexity and training to name a few. For those that build easy to use products like WhatsUp Gold, the internet and the ecommerce business process offer great opportunity for revenue and profitability enhancements.

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Ipswitch Blog

This post was written by Ipswitch Blog

Ipswitch helps solve complex IT problems with simple solutions. The company’s software has been installed on more than 150,000 networks spanning 168 countries to monitor networks, applications and servers, and securely transfer files between systems, business partners and customers. Ipswitch was founded in 1991 and is based in Lexington, Massachusetts with offices throughout the U.S., Europe, Asia and Latin America.