Gartner Survey Finds 30% of Software Providers' First-Time Geographic Expansions Remain Unprofitable After Two Years

Published: 2025-03-11 05:57:12 ET IT

Gartner Analysts Are Sharing Industry Best Practices for Startups to Succeed During Their First-Time Expansion at Gartner Tech Growth & Innovation Conference, March 10-11 in Grapevine, Texas.

Thirty percent of first-time geographic expansions for software providers are still unprofitable two years after launch, according to a survey from Gartner, Inc.

Gartner surveyed 302 software and SaaS providers across North America, EMEA and Asia/Pacific from June to July 2024 and found that there are several mitigating actions that tech CEOs should take to address pitfalls.

Expert Take:

'The first geographic expansion of a tech startup is, by definition, also its riskiest,' said Igor Marchal, Vice President Analyst at Gartner. 'Emerging providers with limited resources are tempted to replicate their proven home market's marketing campaigns, content, messages and sales techniques because it is more expedient, more economical or simply because they see no compelling reason to change them.

'Yet expanding into a new geography requires as much preliminary research and internal due diligence as that of launching a new business,' said Marchal. 'Successful tech CEOs engage and navigate their first expansion with optimal timing, having properly localized their product, processes and go-to-market playbook to meet local buyer preferences. They often leverage local partners to overcome their insufficient reputation and poor local market awareness.'

Gartner Data Snapshot: 7 Actions for Startup Tech CEOs to Succeed in Their First Geographic Expansion

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Source: Gartner (March 2025)

Gartner clients can read more in 'Infographic: 7 Actions for Startup Tech CEOs to Succeed in Their First Geographic Expansion.'

Gartner Tech Growth & Innovation Conference

Gartner analysts are providing analysis on how technology service providers can accelerate growth, drive product innovation and leverage emerging technologies at the Gartner Tech Growth & Innovation Conference, taking place this week in Grapevine, TX. Follow news and updates from the conference on X using #GartnerTGI.

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Media contact

Matt Lodolce

Gartner

matt.lodolce@gartner.com

Meghan Moran

Gartner

meghan.moran@gartner.com