TL;DR - This year a friend and I started a software dev. agency (http://inoutput.io). Previous experience leading dev teams (for similar companies), building startups, and can offer everything from web/mobile/desktop...

So my question is - do you think software/web agencies benefit from specializing in a particular area? (e.g Android apps, or internal business software) - as opposed to "we build everything"?

So far for us it's all good (3 months in). We love building software, and are not losing money. Our work is quite varied - from complex cross-mobile apps, to static HTML sites. But more thinking about where we are heading, and how best to get there.