Software Market Size, Share & Trends Analysis Report By Enterprise Size, By Vertical (BFSI, Retail), By Deployment (On-premises, Cloud), By Type (Productivity Software, Application Software), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global software market size was valued at USD 583.47 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 11.5% from 2023 to 2030. A surge in the volume of enterprise data, rising automation of business processes, and growing digitization are the major drivers of the market. Moreover, rising network security and privacy concerns support the industry's growth. The COVID-19 outbreak positively impacted the global market. The increasing concern about cyber threats during COVID-19 stimulated companies to implement software solutions and configure malware protection, recognition, and mitigation strategies, thus fueling the growth of the market.

In addition, remote working became a new norm and helped increase productivity, and the support from the government to form a tech-led world is driving the market’s growth. The software mainly aims to protect and secure individual computing devices, information systems, internet communication, transactions, and networks. Security software performs tasks, such as access management, data & network protection, as well as security against viruses, intrusions, and any other system-level security risks. The demands of remote working have increased expenditure on cybersecurity software.

With highly sophisticated methods and means of attack development, software innovators are firing back. For instance, in May 2023, Dell Inc., a technology company, enhanced the security software of its storage portfolio PowerStore3 to assist organizations in accelerating the adoption of Zero Trust. This security architecture ensures the authorization of only known entities and model actions. With the security upgrades, organizations can prevent unauthorized modifying or deleting of snapshots before their expiration date. It also permits storage administrators to handle access directly from PowerStore to respond quickly to security threats.

Recent years have observed a considerable adoption of software solutions, driven by the increase of e-commerce, technology developments, such as AI and IoT, and the growing number of connected devices. The rising sophistication of malware and methods of attack as well as its growing accessibility have led to the development of advanced cybersecurity software, including innovative and varied cybersecurity tools and solutions. For instance, in May 2023, Stacklock, a Seattle-based company, raised USD 17.5 billion to protect its software from cybersecurity threats. The company’s investment to protect its software would help gain end-to-end provenance in its software supply chain, enabling them to protect against attacks, mitigate risks, and ensure the integrity of its digital assets.

The COVID-19 pandemic has positively affected the market. During the COVID-19 pandemic, various incidences and cases of cybercrimes were detected across several sectors. The shift toward a remote working model has also augmented the danger of cyber threats across companies. The increasing concerns about cyber threats have stimulated enterprises to implement software solutions and organize malware protection, detection, and mitigation strategies, thereby driving the growth of the overall market. In addition, there is an increase in demand for various social media platforms and software, such as Zoom, Microsoft Teams, Google Hangouts, and WhatsApp video calls, as it helped in working remotely during the pandemic.

Type Insights

The application software segment dominated the market in 2022 and accounted for a revenue share of over 43%. The growth is supported by the rising demand for various software applications designed to accelerate and streamline business processes using cutting-edge IoT technologies and cloud-based solutions. Application software in the market study includes Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain Management (SCM), enterprise collaboration software, Enterprise Content Management (ECM) software, education software, and others. The ERP segment represented a significant share in 2022 owing to the rise in demand for data-driven decisions, increased adoption of mobile & cloud applications, and a growing need for transparency & operational efficiency in business processes.

The development and deployment software segment is anticipated to grow significantly in the coming years. The development and deployment software in the market study includes Enterprise Data Management (EDM), business analytics & reporting tools, application servers, integration & orchestration middleware, and data quality tools. EDM held the highest share in 2022 due to significant factors, such as the increasing shift from manual to automated systems to carry out firm operations, growing security concerns, increasing adoption of parallel processing architecture, and the rising volume of data. In addition, it is anticipated that a rise in demand for cloud-based ERP solutions since COVID-19, especially from small- and medium-sized firms, will create many opportunities for the stakeholders.

Deployment Insights

The on-premises segment led the market in 2022 accounting for over 58% share of the global revenue. The high share can be attributed to the high demand for on-premises software and the regulatory, compliance, and security requirements. Organizations keep confidential information in-house rather than give it over to cloud providers. Moreover, storing information in-house decreases dependencies on third-party organizations and helps protect and monitor data. Thus, the demand for on-premises software is high and this segment contributes more to the market.

The cloud segment is predicted to foresee significant growth in the forecast years. As per the survey, cloud-based software has made significant inroads in recent years, with all industries reaching at least 20% penetrations. The migration of on-premises software to cloud-based software is due to low upfront and infrastructure maintenance costs. Furthermore, the need to access applications across devices and remote places is increasing the demand for cloud-based software. For instance, Silver Lake, a private equity firm, acquired a minor stake in TeamSystem SpA, a cloud software company, for USD 660 billion.

Vertical Insights

The others segment led the market in 2022, accounting for over 22% share of the global revenue. Furthermore, the IT & telecom segment accounted for a significant share of the revenue in 2022. The high share can be attributed to the increased demand for software across various IT and telecom services, including network management and communication tools, Customer Relationship Management (CRM) systems, and Enterprise Resource Planning (ERP) software. The industry fosters the distribution and utilization of software goods and services, generating a need for cutting-edge software solutions. The market is growing organizations and individuals depend on software for various functions, including communication, data management, productivity, and automation, and due to the ongoing development of IT & telecom technologies.

The retail segment is predicted to foresee significant growth in the forecast years. The need to manage cashless transactions, inventory data, keep track of sales, and enhance sales strategy using analytics across retail chains and other establishments has increased the demand for software. The adoption of software in the retail industry is anticipated to increase in response to the rising need for advanced capabilities, such as employee management analytics, sales monitoring, inventory tracking, reporting, and customer data management. As a result, it is anticipated that the software would function with various operating systems, including various versions of Windows, Mac OS, Linux, Android, and iOS, among others. Businesses could offer a large customer base through this approach without encountering issues with software compatibility.

Enterprise Size Insights

The large enterprise segment led the market in 2022 and accounted for over 72% share of the global revenue. The growth is attributed to improved customer engagement & satisfaction, enhanced data access & discovery, enhanced data analysis & visualization, lower operational expenses, and increased productivity. As the need for cutting-edge solutions and information intelligence continues to grow, many large-scale businesses are investing in software. Thus, the increasing investments by large-scale enterprises in deploying cutting-edge technology and software solutions drive the market further.

The SMEs segment is predicted to foresee significant growth during the forecast years. Nearly every country has a significant amount of SMEs. Due to their limited funding, SMEs opt for the more affordable option. In addition to restricted IT investments, some businesses may need assistance investing in these solutions. Thus, the market is anticipated to grow despite SMEs’ low financial resources due to the solutions’ increasing scalability, wide accessibility, and cloud-based installations.

Regional Insights

North America dominated the market in 2022, accounting for over 43% share of the global revenue. Wide adoption of various software and the highest revenue generation by the region support its growth. In addition, the U.S. is a major country in the world that contributed mainly to the software industry. Increased spending on software solutions by large enterprises and SMEs in the region contributed to large revenue generation. Thus, the increasing stringency of data privacy and security standards and policies are the factors that contribute to regional market growth. Asia Pacific is likely to possess lucrative market opportunities in the coming years.

Leading players in the APAC regional market focus on growing their investments, product portfolios, solutions, and strategic partnerships to create robust and easy functionality. China and India are the two major countries contributing to the high generation of the regional market. This can be due to enterprises in the region taking opportunities to go beyond safeguarding their conventions & compliances and applying technology to limit threats on enterprise devices. Furthermore, Asia Pacific has the maximum adoption of mobile and connected devices that are greatly susceptible to endpoint attacks. Thus, the region is expected to grow at the fastest CAGR over the forecast period.

Key Companies & Market Share Insights

The market is characterized by the presence of established as well as new players. Major players are actively focusing on mergers & acquisitions to capitalize on their industry positions. In addition, emerging and innovative companies are involved in upgrading existing software offerings, as well as establishing partnerships to increase their industry share. For instance, in January 2023, Microsoft partnered with HDFC Bank Ltd., an Indian banking and financial services company, to create business value and advance its digital transformation journey. The partnership aims to help the bank improve its digital capabilities and enhance the customer experience. The bank will use Microsoft Azure to modernize and simplify its company's data landscape through a Federated Data Lake, enabling it to grow its information management capabilities across advanced analytics and enterprise reporting using artificial intelligence. Some of the key players in the global software market include:

• IBM Corporation

• McAfee Corporation

• NortonLifeLock Inc.

• Microsoft

• Oracle

• SAP SE

• Adobe Inc.

• VMware Inc.

• Block, Inc.

• Intuit Inc.

Recent Development

• In June 2023, IBM announced to acquire Apptio Inc, a financial and operational management software to advance its IT automation capabilities, and ensure the capability to deliver business value

• In October 2022, Oracle announced the introduction of Oracle Alloy, a new cloud platform to provide cloud services to its customers, and provide full control on operations to address regulatory needs

• In September 2022, NortonLifeLock announced a merger with Avast to redefine and reimagine cyber safety for businesses around the world

• In March 2022, Microsoft Corp. announced the acquisition of Nuance Communications Inc. to provide affordable and accessible healthcare, and assist organizations to provide personalized customer experience

Software Market Report Scope

Global Software Market Report Segmentation

This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2017 to 2030. For this report, Grand View Research has segmented the software market based on type, deployment, enterprise size, vertical, and region:

• Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Application Software

    • Enterprise resource planning (ERP)

    • Customer Relationship Management (CRM)

    • Supply Chain Management (SCM)

    • Enterprise Collaboration Software

    • Enterprise Content Management (ECM) Software

    • Education Software

    • Others

  • System Infrastructure Software

    • Network Management Systems (NMS)

    • Storage Software

    • Security Software

  • Development and Deployment Software

    • Enterprise Data Management (EDM)

    • Business Analytics & Reporting Tools

    • Application Servers

    • Integration & Orchestration Middleware

    • Data Quality Tools

  • Productivity Software

    • Office Software

    • Creative Software

    • Others

• Deployment Outlook (Revenue, USD Billion, 2017 - 2030)

  • On-premises

  • Cloud

• Enterprise Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • Small & Medium Enterprises

  • Large Enterprises

• Vertical Outlook (Revenue, USD Billion, 2017 - 2030)

  • IT & Telecom

  • BFSI

  • Retail

  • Government/Public Sector

  • Energy & utilities

  • Healthcare

  • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa (MEA)

    • UAE

    • Kingdom of Saudi Arabia

    • South Africa