The Software Market is projected to grow at a CAGR of 11.2% from 2024 to 2031. The market value is expected to increase from USD XX billion in 2024 to USD YY billion by 2031.
North America currently dominates the market, with key metrics indicating a high adoption rate of software solutions across various industries. The market is experiencing rapid growth due to digital transformation initiatives, increasing demand for cloud-based solutions, and advancements in technologies such as AI and machine learning.
Market Trend: Shift towards Software-as-a-Service (SaaS) models
The software market is increasingly changing to Software-as-a-Service (SaaS) models. When compared to traditional on-premise software, SaaS solutions provide greater flexibility, scalability, and cost-effectiveness, which is driving this trend. Businesses are increasingly using SaaS products for a variety of purposes, such as customer relationship management and corporate resource planning. Gartner predicts that the SaaS industry will be worth $170.9 billion by 2022, with a 16% compound annual growth rate. This trend is reshaping the software business, as many established vendors transition to cloud-based subscription models. The COVID-19 pandemic has intensified this trend, as enterprises look for flexible and remote software solutions. The SaaS model also allows for faster upgrades and innovations, allowing software companies to constantly enhance their systems and respond rapidly to changing market demands.
Market Driver: Digital transformation across industries
Digital transformation projects across multiple industries are a primary driver of software industry growth. Companies are spending heavily in digital technologies to improve operational efficiency, improve customer experiences, and gain a competitive advantage. According to IDG research, 91% of organisations have chosen or plan to implement a digital-first corporate strategy. The digital revolution is increasing demand for a variety of software products, including commercial software, analytics tools, and consumer engagement platforms. For example, the manufacturing industry is implementing Industry 4.0 technologies that rely largely on software for automation and data transfer. Similarly, healthcare organisations are investing in electronic health records and telemedicine technology. The banking industry is embracing fintech solutions, driving up need for sophisticated software. This widespread digital transition creates huge opportunity for software companies across a variety of industrial areas.
Market Restraint: Cybersecurity concerns and data privacy regulations
Despite growing acceptance of software solutions, cybersecurity concerns and stricter data protection rules are major hurdles to industry expansion. With the rise of cloud computing and networked devices, the risk of data breaches and cyber attacks has skyrocketed. IBM calculated that the average cost of a data breach in 2021 was $4.24 million, the highest level in 17 years. Businesses have been more concerned about the security of software solutions, particularly cloud-based services. Furthermore, rules such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States place stringent restrictions on how businesses manage and utilise data. Compliance with these standards usually necessitates large investments in software updates and data management solutions. These worries can stymie software adoption, especially among small and medium-sized businesses, and raise expenses for software developers who want to ensure their products meet high security and compliance standards.
Enterprise software dominates the type segment, driven by increasing business process automation and digital transformation initiatives.
The enterprise software category dominates the software market, accounting for more than 40% of total sales. This dominance is due to the increasing demand for integrated business solutions capable of managing complex processes across huge businesses. Enterprise software applications include solutions such as ERP, CRM, supply chain management, and business intelligence.
Recent advancements to business software have strengthened its market position. The incorporation of AI and machine learning skills improved these systems' predictive and analytical capacities. For example, SAP's S/4HANA platform uses AI to give real-time insights and automate a variety of business processes.
The market has also seen a considerable move to cloud-based enterprise software solutions. Gartner predicts that the cloud system infrastructure services (IaaS) industry will be worth $64.3 billion in 2020, up 40.7%. This change is motivated by a need for increased flexibility, scalability, and cost-effectiveness in enterprise IT infrastructure.
Furthermore, the COVID-19 epidemic has accelerated the use of enterprise software solutions for remote work and digital collaboration. Microsoft reported a 775 percent increase in the use of its cloud services in areas implementing social separation in 2020, highlighting the critical importance of enterprise software in ensuring business continuity during difficult times.
North America leads the global software market, driven by high technology adoption rates and the presence of major software companies.
North America dominates the software sector, with more than 35% of the overall worldwide market share. This dominant position is primarily due to the widespread use of new technologies, the presence of large software businesses, and significant investments in R&D. The United States has been at the forefront of software innovation, with businesses such as Microsoft, Oracle, and Salesforce.
Recent industrial breakthroughs in North America indicate an increasing reliance on cloud computing, artificial intelligence, and cybersecurity solutions. According to our analysis, the US cloud computing business is predicted to be worth $500 billion by 2024, increasing at a CAGR of 19.1%.
Key data highlight North America's immense commercial potential. According to the CompTIA Cyberstates report, the technology industry in the United States employs more than 12.1 million people, with software developers making up the majority of these positions. This vast network of technical talent continues to fuel innovation and economic success.
In Canada, the Digital Charter Implementation Act, introduced in 2020, seeks to expand the country's digital economy, potentially increasing need for software solutions that protect data privacy and security. The Act is expected to open up new opportunities for software businesses who specialise in data protection and compliance solutions.
The software market is tremendously competitive, with rapid technology improvements and shifting customer demands. To retain their market positions, major corporations prioritise innovation, strategic partnerships, and mergers and acquisitions.
Microsoft Corporation remains a key player, exploiting its diverse range of products and services. The company's emphasis on cloud computing via the Microsoft Azure platform, as well as continual improvements to its Office 365 suite, have helped it achieve major market success. Microsoft's fiscal year 2022 sales were $198 billion, with the Intelligent Cloud division growing by 25%.
Oracle Corporation has rapidly expanded its cloud infrastructure and applications business. The company's focus on autonomous database technology and industry-specific cloud apps has allowed it to maintain its lead in the business software market. Oracle announced $42.4 billion in total revenue for fiscal 2022, with 72% coming from cloud services and licensing support.
Salesforce and other new entrants have used cloud-native technology to challenge the traditional software ecosystem. Salesforce's rapid expansion has been powered by its emphasis on CRM and expanding portfolio of cloud solutions for a variety of business operations. The corporation's revenue for fiscal year 2022 was $26.5 billion, a 25% increase from the previous year.
AI-focused corporations are also expanding in the market, posing new challenges to traditional businesses. Companies that specialise in robotic process automation and data analytics, such as UiPath and Databricks, are quickly increasing market dominance.
Looking ahead, strategic alliances between software companies and industry-specific firms are projected to have an impact on the competitive landscape. These collaborations strive to create bespoke solutions for certain sectors, thereby expanding market opportunities and increasing consumer value.
The software market is at a crossroads, with multiple new advances combining to change the industry. One key development to watch is the increasing integration of artificial intelligence and machine learning into many forms of software. This integration not only improves existing software capabilities, but it also provides entirely new categories of AI-powered applications.
Another significant development is the increasing popularity of low- and no-code platforms. These platforms democratise software development by empowering non-technical individuals to construct applications and automate operations. This tendency could have a substantial impact on market dynamics, creating a new category of "citizen developers" and altering the role of professional software developers.
Another area where the software business may experience significant disruption is the shift to edge computing. As computers move closer to the data source, there will be a greater need for edge-specific software. This could lead to new opportunities in fields such as IoT, real-time analytics, and autonomous systems.
Finally, the rising emphasis on sustainability and environmental, social, and governance (ESG) considerations is projected to influence software development and adoption. We should expect more software solutions that assist firms in measuring, reporting, and improving their ESG performance. This trend may open up new market segments and drive innovation in areas such as carbon footprint monitoring, sustainable supply chain management, and ESG reporting systems.
Microsoft Corporation
Oracle Corporation
SAP SE
Salesforce.com, Inc.
IBM Corporation
Adobe Inc.
VMware, Inc.
Intuit Inc.
Symantec Corporation
Autodesk, Inc.
June 2023: Microsoft announced the inclusion of its AI-powered Copilot feature across all Office products, signalling a significant move towards AI-augmented productivity tools.
Oracle announced its new Oracle Cloud Infrastructure (OCI) AI services in April 2023, with the goal of making it easier for organisations to create and deploy AI-powered apps.
1. INTRODUCTION
1.1. Market Definitions & Study Assumptions
1.2. Market Research Scope & Segment
1.3. Research Methodology
2. EXECUTIVE SUMMARY
2.1. Market Overview & Insights
2.2. Segment Outlook
2.3. Region Outlook
3. COMPETITIVE INTELLIGENCE
3.1. Companies Financial Position
3.2. Company Benchmarking -- Key Players
3.3. Market Share Analysis -- Key Companies
3.4. Recent Companies Key Activities
3.5. Pricing Analysis
3.6. SWOT Analysis
4. COMPANY PROFILES (Key Companies list by Country) (Premium)
5. COMPANY PROFILES
5.1. Microsoft Corporation
5.2. Oracle Corporation
5.3. SAP SE
5.4. Salesforce.com, Inc.
5.5. IBM Corporation
5.6. Adobe Inc.
5.7. VMware, Inc.
5.8. Intuit Inc.
5.9. Symantec Corporation
5.10. Autodesk, Inc. (LIST NOT EXHAUSTIVE)
6. MARKET DYNAMICS
6.1. Market Trends
6.1.1. Shift towards Software-as-a-Service (SaaS) models
6.1.2. Increasing integration of AI and machine learning across software types
6.1.3. Growing importance of low-code and no-code platforms
6.2. Market Drivers
6.2.1. Digital transformation across industries
6.2.2. Increasing demand for cloud-based solutions
6.2.3. Advancements in AI and machine learning technologies
6.3. Market Restraints
6.3.1. Cybersecurity concerns and data privacy regulations
6.3.2. Complexity of integration with legacy systems
6.4. Market Opportunities
6.5. Porter's Five Forces Analysis
6.5.1. Threat of New Entrants
6.5.2. Bargaining Power of Buyers/Consumers
6.5.3. Bargaining Power of Suppliers
6.5.4. Threat of Substitute Products
6.5.5. Intensity of Competitive Rivalry
6.6. Supply Chain Analysis
6.7. Value Chain Analysis
6.8. Trade Analysis
6.9. Pricing Analysis
6.10. Regulatory Analysis
6.11. Patent Analysis
6.12. SWOT Analysis
6.13. PESTLE Analysis
7. BY TYPE (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
7.1. Application Software
7.2. System Software
7.3. Enterprise Software
7.4. Embedded Software
8. BY DEPLOYMENT (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
8.1. Cloud-Based
8.2. On-Premise
9. BY END-USER (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
9.1. BFSI
9.2. Healthcare
9.3. IT & Telecom
9.4. Retail
9.5. Manufacturing
9.6. Government
9.7. Others
10. REGION (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
10.1. North America
10.1.1. United States
10.1.2. Canada
10.1.3. Mexico
10.2. South America
10.2.1. Brazil
10.2.2. Argentina
10.2.3. Rest of South America
10.3. Europe
10.3.1. Germany
10.3.2. United Kingdom
10.3.3. France
10.3.4. Italy
10.3.5. Spain
10.3.6. Russia
10.3.7. Rest of Europe
10.4. Asia-Pacific
10.4.1. China
10.4.2. Japan
10.4.3. India
10.4.4. Australia
10.4.5. South Korea
10.4.6. Rest of Asia-Pacific
10.5. Middle-East
10.5.1. UAE
10.5.2. Saudi Arabia
10.5.3. Turkey
10.5.4. Rest of Middle East
10.6. Africa
10.6.1. South Africa
10.6.2. Egypt
10.6.3. Rest of Africa
*NOTE: All the regions mentioned in the scope will be provided with (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
By Type:
Application Software
System Software
Enterprise Software
Embedded Software
By Deployment:
Cloud-Based
On-Premise
By End-User:
BFSI
Healthcare
IT & Telecom
Retail
Manufacturing
Government
Others
By Region:
North America
Europe
Asia-Pacific
Latin America
Middle East & Africa
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