How to Make the Software Vendor Shortlist

The good news for software vendors is that global revenue is expected to grow by more than 11% annually through 2029, says Morningstar, an independent investment research and financial services firm. This upward momentum, they say, is being fueled by ongoing tech advancements and digitalization efforts worldwide. Though some segments may experience brief slowdowns, the overall industry trajectory remains positive.
With that positive data in their back pocket, ISVs can now adjust their sales projections to forecast an automatic 10% jump in annual revenue – right? Well, not quite yet. Nothing is ever guaranteed and there are a number purchasing factors that can put the brakes on achieving those revenue goals. A few of those barriers include:
- Market Saturation: Many software categories are overcrowded with vendors, making differentiation increasingly difficult.
- Lower Barriers to Entry: Cloud infrastructure, open-source components, and low-code development tools make it easier for new players to build and launch software quickly.
- Globalization of Sales: Companies now compete globally as buyers can easily evaluate and purchase software from vendors anywhere in the world, raising the competitive bar.
In such a competitive environment, winning often comes down to deep customer understanding, clear value demonstration, and flawless execution across the full buyer journey. Buyers are weighing more factors with every purchase decision than ever before.
In the early stages of the buying process, vendors must establish superiority by demonstrating that their solution addresses the most consequential purchasing criteria such as Return on Investment (ROI), a compelling value proposition, and Total Cost of Ownership (TCO). The ROI and business value of the software must support key business goals and long-term strategies of the buyer. In addition to licensing costs, the TCO must take into account the cost of implementation, integration, infrastructure, support, training, downtime risk, and upgrade cycles. Other purchasing factors that come into play at this stage include vendor reputation and stability, security and risk management, scalability, customization, and extensibility.
So, let’s assume that you and a few other vendors have passed the first major hurdles in the buying process and made it on to the shortlist of vendors. What are the key steps to securing the win?
Some of those steps can be found in Gartner’s Digital Markets’ 2025 Tech Trends Survey of 3,500 software buyers from around the world. The report breaks down how software buyers go from an initial list of options to a shortlist of serious contenders.
The report notes that software buyers in 2025 are ready to invest but unwilling to compromise. They are eager to invest in modern technology to achieve business goals, but not if it introduces new problems with everything they’ve implemented before.
Here are some of the key findings of the research:
- Businesses are ready to invest heavily in software: 82% of growth businesses plan to spend more on software in 2025 compared to 2024.
- Reputation and experience shape initial vendor lists: Vendor reputation (53%) and prior experience with a vendor (48%) are the most influential factors when creating initial lists.
- Customer reviews are the top source for forming shortlists: 41% of buyers use customer reviews when researching to narrow down their shortlist options.
According to the report, trials make or break the purchase decision: 62% of buyers say the product trial is their top factor in the final purchase decision, followed by vendor customer support (57%), product demo (54%), and impression of the sales representative (51%).
In our own customer research, we’ve found that software licensing flexibility is a critical selling point for ISVs to secure the purchase. The ability for an ISV to license their software in a way that is most cost-effective for their customers provides a great competitive advantage over vendors relegated to a single licensing option. ISVs who can offer a comprehensive range of license models, including both traditional models like single user licenses or network licenses as well as modern consumption, user-based license models, and trial licenses, are better equipped to serve their customer’s market needs. Hence, license flexibility becomes another factor in making it to the top of the shortlist.
If you’re looking to deepen your understanding of the core pillars behind CodeMeter’s secure and versatile licensing approach, don’t miss our recorded webinar Unleash the Power of CodeMeter. Discover how to seamlessly integrate CodeMeter into your software, unlock powerful licensing features, and streamline your entire back-office workflow—from entitlement creation to license delivery and lifecycle management. This session is your gateway to mastering protection, flexibility, and operational efficiency in one unified platform.