Software Services Market Report 2025

The software services market size has grown strongly in recent years. It will grow from $1.49 trillion in 2024 to $1.61 trillion in 2025 at a compound annual growth rate (CAGR) of 8.5%. The growth in the historic period can be attributed to globalization of business, enterprise resource planning (ERP) systems, cybersecurity concerns, business process automation, cloud computing.

The software services market size is expected to see rapid growth in the next few years. It will grow to $2.43 trillion in 2029 at a compound annual growth rate (CAGR) of 10.8%. The growth in the forecast period can be attributed to internet of things (iot) integration, artificial intelligence (ai) and machine learning, remote work solutions, augmented reality (ar) and virtual reality, edge computing solutions. Major trends in the forecast period include sustainable and green technologies, 5g technology implementation, digital transformation, cloud-native development, focus on user experience (ux) design, subscription-based and saas models.

The rising automation of business processes is projected to drive the growth of the software services market in the coming years. Automation involves using technology to perform tasks with minimal human intervention. This approach not only helps in containing and reducing costs but also offers significant opportunities to enhance customer service while steadily lowering expenses. Consequently, the demand for automation in business processes is expected to elevate the software services market. For example, in April 2024, the International Federation of Robotics, a Germany-based professional non-profit organization, reported that manufacturing firms in the United States significantly increased their investment in automation, with industrial robot installations rising by 12% to reach 44,303 units in 2023. Therefore, the growing automation of business processes is fueling the expansion of the software services market.

The increase in remote work is anticipated to be a significant driver of growth in the software services market. Remote work, which is defined as a work arrangement allowing employees to carry out their job duties outside of a traditional office environment, has gained immense popularity. This trend highlights the demand for software services that enable seamless collaboration experiences, encompassing communication, project management, and virtual meetings. For example, in February 2023, the Office for National Statistics, a UK-based government agency, reported that between September 2022 and January 2023, 16% of working adults indicated that they worked exclusively from home, while a higher 28% stated they worked both from home and in the office. The increasing prevalence of remote work is a crucial factor propelling the growth of the software services market.

Technological advancement is a prominent trend gaining traction in the software services market, with major companies actively focusing on developing new technologies to strengthen their market positions. An example is Valvoline Inc., a US-based provider of automotive and industrial solutions, which, in January 2023, launched Vision Service Lane Technology. This unique feature provides a tailored, VIN-specific menu of services, empowering service departments to increase income. Vision stands out as one of the most detailed fixed-ops software products available, addressing pain points and unrealized potential in current software through collaborations with partners. Advisors use Vision to establish relationships, trust, and responsibility with clients in the service drive or at the service desk, reflecting a commitment to technological innovation in the software services market.

Leading companies in the software services market are actively engaged in the development of innovative products, such as cloud infrastructure platforms, to expand their customer bases, drive sales, and increase revenue. A cloud infrastructure platform, also known as a cloud platform or cloud computing platform, encompasses a comprehensive set of services and resources provided by a cloud service provider (CSP) for building, deploying, and managing applications in the cloud. An exemplary illustration is Oracle Corporation, a prominent US-based computer software company, which in October 2022, introduced Oracle Alloy. This unique offering is designed to empower service providers, integrators, independent software vendors (ISVs), and various organizations, including financial institutions and telecommunications providers, to transition into cloud providers. Oracle Alloy enables these entities to seamlessly introduce new cloud services to their clientele. It offers customization, branding, and tailoring capabilities to deliver a unique user experience. Organizations can also bundle additional value-added services and applications to meet the specific demands of their markets and industry verticals.

In October 2022, Aptean, a leading US-based provider of purpose-built, industry-specific software, acquired Merlin Business Software Ltd. for an undisclosed amount. This acquisition is expected to enhance Aptean's ability to support UK distributors and wholesalers, with Merlin's software being deployable on-premises or in the cloud as a subscription-as-a-service (SaaS). Merlin Business Software Ltd., a UK-based provider, specializes in offering bespoke enterprise business software solutions. The acquisition aligns with Aptean's strategy to strengthen its presence in specific industries and geographic regions, showcasing the ongoing evolution and expansion within the software services market.

Major companies operating in the software services market include Microsoft Corporation, Oracle Corporation, Epicor Software Corporation, International Business Machines Corporation, Infor Inc., Deltek Inc., Acumatica Inc., Unit4, Syspro Technologies, TOTVS S.A, SAP SE, Cloud Software Group Inc., Qliktech International AB, Tableau Software Inc., SAS Institute Inc., NetSuite Inc., Salesforce Inc., Adobe Inc., Workday Inc., Plex Systems Inc., Aras Corporation, PTC Inc., Autodesk Inc., Dassault Systemes, Parasoft, ComplianceQuest, Siemens AG, Atlassian Corporation, Hewlett Packard Enterprise, Veeva Systems, Intellect Software Solutions Pvt. Ltd., Kovair Software Inc.

North America was the largest region in the software services market in 2024. The regions covered in the software services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the software services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Software as a Service (SaaS) refers to a service delivery model where a cloud provider hosts software applications and offers access to end-users over the internet. This approach enables businesses to enhance client engagement and deliver efficient customer care.

The primary software categories within software services encompass finance, sales and marketing, human resources, supply chain management, and others. Financial software streamlines the automation, management, and storage of financial data, catering to both personal and professional needs. Services related to software services include consulting, managed services, and support and maintenance, serving a wide spectrum of enterprises, from large corporations to small and medium-sized businesses. These solutions are designed for cloud-based and on-premise deployment and find applications across diverse sectors such as aerospace and defense, banking and financial services, government, healthcare, IT and telecommunications, manufacturing, retail, transportation, and various other industries.

The software services market research report is one of a series of new reports that provides software services market statistics, including software services industry global market size, regional shares, competitors with software services market share, detailed software services market segments, market trends, and opportunities, and any further data you may need to thrive in the software services industry. This software services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The software services market includes revenues earned by entities by providing software training services, software insurance services, legal software services, software security services, and other related services. The market value includes the value of related goods sold by the service provider or included within the service offering. The software services market also includes sales of accounts software, database software, asset management software, billing software, and other related products. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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