Abstract
The prospects of locally operating small software firms have lately been dimmed by the processes of globalisation, Information Technology (IT) outsourcing and offshore software development. In this study, the current situation of the small local software firms serving the globally operating forest industry in south-east Finland is analysed. The analysis identified three types of local software firms. Using business processes, technologies and the types of customer relationships as the bases, these can be labelled as anticipator, specialiser and collector. The small software firms had recognised their inability to compete with globally operating software enterprises and they had difficulties in coping with the changes in competition caused by outsourcing, mergers and offshore development. The analysis of the future trends produced three possible models of cooperation between asymmetrical partners, tailored solutions providers, software producers and capacity providers.
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