Global Expansion Seems Like the Golden Ticket, But Don’t Get Caught Out by Common Mistakes
AWS’ Lexie Knauer offers insights on how global expansion seems like the golden ticket, but don’t get caught out by common mistakes. This article originally appeared on Solutions Review’s Insight Jam, an enterprise IT community enabling the human conversation on AI.
Software companies are eager to go global with the promise of ramping up revenue, reducing reliance on single markets, and creating complementary solutions. It’s especially enticing as regions like Asia Pacific are digitizing at pace, with the software market expected to grow to $99.3 billion by 2027. But while expansion is a compelling opportunity and many regions are primed for growth, it’s important not to chase it opportunistically.
Going global can be challenging when you’re up against heavy competition, rapid technology advancement, and ever-evolving client demands. New markets also mean navigating new customers and new regulations. If you fail to prepare, you could face everything from fines to soaring customer acquisition costs. That said, expansion shouldn’t be feared. Those who think ahead and take a comprehensive approach will be best positioned to seize the first-mover advantage. Consider these four common mistakes and how to solve for them:
Mistake #1: Forgetting to Do Your Homework
Many companies enter a crowded market without finding their market fit, amplifying the risk of software failing to land. Even once they’ve found their competitive sweet spot, a thorough strategic evaluation is needed to validate objectives. By understanding the company holistically and how its people can deliver against expansion goals, software companies can confidently start planning their move.
Solution: Think About the Bigger Picture
Start by asking yourself key questions: Is this a top priority for your leadership? Are they in a position to scale? Do they know how to empower someone locally to drive that business? If key hires are required, should you look at reseller or channel models?
Ultimately, you can’t simply replicate the approach in your current region. Your target market’s language, culture, buying behaviors, and regulatory environment could be completely different, so you may need to build a team of experts with a deep understanding of those nuances. Organizations have approached me saying that they want to expand into Europe, yet this is such a vast market with distinct characteristics. Even within markets, differences can be localized. A location strategy is therefore key to seeing which markets to prioritize, and which may be a no-go.
Marketing, sales, and modelling should come into your strategic evaluation too. After all, it’s tough to crack into a new market and achieve brand awareness. Intimate local marketing events with industry leaders are great places for building word-of-mouth momentum and sharing lighthouse use cases. Leaning on partners’ local sales forces can also help grasp buyer behaviors and capture demand in your target market.
Mistake #2: Losing Trust with Security and Compliance Slip-Ups
Stepping into new geographic markets opens new regulations, data privacy, and sovereignty requirements. If you fail to keep track, you risk fines and security breaches. Worse still, you can lose customer trust. Recent research from Gartner reveals that security and cost are the main drivers for software product selection globally in English-speaking markets, and 47 percent of buyers are concerned about cyber events. It’s therefore integral to build a strong security posture to attract and maintain customers.
Solution: Get Closer to the Risks and Regulations
The nature of your product governs how complex the task is. In spaces such as finance and MarTech, software companies face stringent requirements around data storage, processing, and transmission. Expanding into new audiences, such as the public sector, also demands new security evaluations. For certification-based regulations, the process is relatively straightforward, but with the likes of GDPR it’s trickier. There is no rubber stamp—it’s about your willing to take on and creating a security posture you’re comfortable with.
Furthermore, companies operating multi-tenant architectures require strong measures to help prevent data leakage and security incidents. This should include using data isolation mechanisms to separate datastores for each tenant, data encryption at rest and in transit, and proper access controls. Systems for monitoring and observability are also essential for maintaining secure shared infrastructure. By using tenant identifiers, issues specific to tenants can be quickly isolated and diagnosed.
When security can be complex, culturally determined, and subjective, compliance automation software (such as Drata and Secureframe) and regulatory experts can provide peace of mind. Professional consultants and perform assessments and roadmaps to help protect data across your architecture.
Mistake #3: Adding to Technical Baggage
If software companies don’t have high-performing, resilient, and efficient infrastructure, efforts can quickly come to a halt from architectural blockers, downtime, and rocketing costs. If you have heavy technical debt in one region, carrying it to another will just add to existing performance and scalability issues. This is an opportunity to modernize and build greater flexibility long-term.
Solution: Stay Close to Proven Frameworks and DevOps Practices
Well-architected reviews can help pinpoint workload improvements across multiple dimensions, offering guidance aligned with your industry, operations, and internal processes. As well as reducing technical debt, best-practice frameworks uncover cost optimizations across areas such as data transfer, storage, and logging to protect your bottom line as you move into new regions. As an example, running a data center in Asia-Pacific is often more expensive, so adjusting your pricing strategy accordingly will help ensure profitable operations.
Implementing robust DevOps practices can also help you manage global infrastructure while staying nimble. Infrastructure as Code, for instance, makes it easier to maintain consistency through automated provisioning across regions. Additionally, centralized mechanisms for monitoring and logging offer visibility into system performance and health, so you can identify and resolve issues quickly while maintaining smooth operations globally.
This was particularly impactful for a customer I recently worked with. Amid unprecedented spikes in traffic, the business was painstakingly planning capacity requests ahead of time which impacted latency. However, by taking advantage of automatic monitoring and scaling, they can now maintain a resilient delivery pipeline and the best price performance.
Last but not least, rather than trying to build the perfect product for your target region, starting with a minimum viable product will help you test features. You can then see if it’s a good market fit before investing further and maturing your product. By putting continuous integration/continuous deployment pipelines in place, the build, test, and deployment processes can be automated for faster and more frequent releases. As you improve products, software can be updated simultaneously to streamline time-to-market.
Mistake #4: Embarking on the Journey Alone
When transacting with unknown customers, coming in cold puts you at an immediate disadvantage. It takes time to engage customers, and it’s tough if you don’t understand the nuances in their language, buying and selling culture, and positioning. Partners with existing relationships and seller rapport in those markets can drastically simplify and accelerate the process.
Solution: Call on Partners for Co-Marketing and Co-Selling
When looking for a partner, there needs to be trust and mutual benefit. This means working together transparently, aligning sales goals, and ensuring there’s executive engagement. A great partner doesn’t just have proven experience—they’re agile and able to bring in outside experts if needed. They look at your business holistically with a people-centric manner, working backwards from your customers and goals to guarantee you have the right team to successfully expand.
In addition to nurturing a global partner network, marketplaces can act like a global transaction vehicle, connecting you to organic opportunities you wouldn’t see otherwise and speeding up the sales cycle. When software is available and easy to buy, you benefit from a boost towards product-led growth.
Be Patient and Plan Ahead
There’s no one-size-fits-all or quick-fix for global expansion. Instead of chasing customer demand, software companies need to be realistic about timelines. Ultimately there are multiple elements to navigate: aligning goals at a leadership level, finding the right product-market fit, putting the right people in place, building the right architecture, and leaning on partners for strategic and technical guidance. Championing this comprehensive, business-level approach will set you up for success on the global stage.