What is it like being a Software analyst now??

Based on the most helpful WSO content, the current state of equity research, including software analysts, has been significantly impacted by industry trends like MiFID II and cost-cutting measures. Here's what you need to know:

1. Industry Challenges:

   • The equity research industry has seen a prolonged period of consolidation, with low-quality sell-side research being phased out. This trend is expected to continue.
   • Teams are being forced to do more with less, as firms cut costs and reduce headcounts. This has led to fewer analysts covering companies, with a focus on those who can provide differentiated insights.

2. Buy-Side Perspective:

   • From a buy-side standpoint, the value of research has shifted. Analysts who can provide thematic or industry primer pieces, rather than regurgitating press releases, are more appreciated.
   • The buy-side tends to screen analysts' recommendations and coverage universes before engaging, so depth and niche expertise are critical.

3. Opportunities and Risks:

   • Covering the software space on the buy-side could be promising if you can carve out a niche and provide unique insights. However, the competition is fierce, and only a few analysts are truly valued for their work.
   • The downside is that many buy-side professionals view sell-side opinions skeptically, especially if they come from analysts who lack depth or originality.

4. Team Cuts:

   • Yes, teams are getting cut, and the industry is downsizing. This is particularly true for sell-side research, where only the most valuable analysts are likely to survive.

In summary, while the software space can be an exciting area to cover, the current environment demands exceptional skill, niche expertise, and the ability to provide real value to the buy-side.

Sources: Breaking into buy-side equity research - my experience, Future of Equity Research - 12+ Months into MIFID II, Overview of the Equity research Industry, Goldman Sachs SLC IBD Overview, Why are Equity Research and Investment Management looked down upon?