4 Strategic Questions for Software Leaders in 2025

Software companies face a business environment that continues to evolve in unforeseen ways. Here are four key questions leaders should ask themselves to prepare for this new era.

As we begin a new year, software companies face a business environment that continues to evolve in unforeseen ways. Shifts in market dynamics, political uncertainty, and the rapid advancement of artificial intelligence (AI) are forcing companies to make strategic decisions that will define their future. 

In this new era, company leaders should ask themselves four key questions—not just about surviving in the current landscape, but about positioning for long-term success, managing complexity, and navigating both internal and external challenges. 

Thoughtful, disciplined leadership will be more important than ever in making these decisions.

1. HOW WILL YOU COMPETE IF WE ENTER INTO AN ERA OF CONSOLIDATION?

M&A activity levels haven’t returned to their 2021 peak, and they’re unlikely to do so in the current environment. Overall, deal volume is about 50% less than it was. The consolidation trend that dominated the tech landscape just a few years ago continues to have ripple effects because many larger competitors are just now working out the kinks of their acquisitions, and more recent deals have been extremely strategic. 

Executives should thoroughly assess the new landscape to see where they fit. They should also have their teams keep tabs on their competitors and others who may be consolidating in their industry. The answer to this question lies in the interplay between your product’s core strengths, the strategic partnerships you leverage to fill strategic gaps, and the ability of your solution set to meet your customers’ critical needs at a sensible price. It’s also important for executives to ensure that their capital allocation emphasizes true differentiation and rapid responsiveness to shifting market conditions.

2. HOW DO WE MAINTAIN A POSITIVE BUSINESS CULTURE IN AN ERA OF DIVISIVENESS? 

While the U.S. election is over, the divisiveness that has marked our political culture is not. Politics at home and abroad will continue to cause interpersonal friction within companies. From the partisan split in the electorate to wars in Ukraine and Israel, emotions continue to run high.

Executives may need to help people navigate tense interpersonal exchanges or hostilities simmering below the surface. It won’t solve every instance of friction, but executives can do themselves—and their employees—a favor by building a culture that leans into shared goals and objectives. You can unify people by getting things done. 

3. HOW CAN WE MANAGE DECISION-MAKING AMID A TSUNAMI OF DATA?

The volume and velocity of data are overwhelming for many leaders. Between the need for long-term planning and the demand for agility, data continues to create tension in fast-growing companies. According to a 2023 study commissioned by Oracle, 74% of people say the number of decisions they make every day has increased 10-fold over the last three years, and 86% say the volume of data makes decisions in their personal and professional lives much more complicated.

Companies must be flexible enough to respond to new and evolving data, and leaders need to identify which data points truly move the needle. Only extremely strong execution rigor will create clarity in the midst of the data noise.

4. HOW CAN WE MANAGE DATA PRIVACY WITH AI EVERYWHERE? 

AI is at the top of everyone’s minds. SaaS-based companies, in particular, are facing questions over how they use customer data, whether it could be used to train AI models, and the privacy implications for customers. When software providers are dealing with mission-critical systems or when that data is intertwined into necessary business functions, they should make concrete assurances that the data is safe. Some companies may build software in-house if their data security needs aren’t met. That, in turn, could pose new challenges to software companies’ go-to-market strategies. 

LEADERSHIP IN A VOLATILE BUSINESS ENVIRONMENT

The risk of instability in the business world is always present, but companies that focus solely on staying afloat will fall behind their competitors who are taking bold action to capitalize on opportunities. 

While there are a lot of unknowns and things outside of a company’s control, software leaders must think ahead and make decisions with a long-term perspective on the things they can control now. Asking questions that address business-critical issues such as navigating friction and managing emerging technology like AI can help them guide their teams through a constantly evolving business environment while also keeping an eye on emerging challenges and opportunities. As always, thoughtful leadership and strategic decision-making will be crucial for success and growth in the coming year and beyond.