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The business software services market size is projected to increase by USD 163.56 billion at a CAGR of 11.23% between 2023 and 2028. The escalating demand for cloud-based business software, encompassing specific software, is the driving force behind market growth. This surge, buoyed by reduced upfront costs, impacts software development expenditures and software licensing. Additionally, cloud platforms mitigate the need for costly IT infrastructure. Enterprises, including small and medium-sized businesses, BFSI, and government sectors, are embracing cloud solutions for streamlined operations and cost-effectiveness.
Furthermore, support and maintenance fees are minimized with managed services, promoting business expansion initiatives. This shift, coupled with the Joint Purpose Agreement (JPA), facilitates access to voluminous enterprise data and virtual assistants, augmenting productivity across diverse segments like human resource segment management.
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The market share growth by the on-premises segment will be significant during the forecast period. These are majorly used by large enterprises with a global presence to have more secure control and ownership over organizational data and activities. In the on-premises deployment model, resources are accessed only through dedicated networks, whereas in the cloud-based deployment model, the resources can be accessed by multiple users, which makes it more vulnerable to security breaches.
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The on-premises segment showed a gradual increase in the market share of USD 103.84 billion in 2018. Organizations across the banking, financial services, and insurance (BFSI), manufacturing, and IT industries, among others, deal with huge volumes of sensitive customer-related information. Government bodies are also implementing various regulations across industries, such as healthcare and BFSI, to focus on data security. Consequently, changing regulations related to customer data and security-related concerns are expected to increase the demand for the on-premises deployment model, which, in turn, will foster the growth of the market in focus during the forecast period.
The large enterprises segment held a significant market share in the global market in 2023. Large enterprises are embracing the digital transformation journey as it helps them ensure smoother execution of business processes cost-effectively. Furthermore, the growing complexity of business operations due to the deployment of digital technologies like IoT, AI, and big data makes it necessary for large enterprises to have a robust digital transformation framework to have seamless coordination, better adaptability, and data protection in business operations. Another key factor fueling the growth of the global market across large enterprises is the increasing use of data-driven decision-making on a global scale. Thus, such factors are expected to fuel the growth of the large enterprises segment, which, in turn, will propel the growth of the market in focus during the forecast period.
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APAC is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Another region offering significant growth opportunities to market players is North America. The market in North America is expected to grow as countries such as the US and Canada are among the most technologically advanced countries and pioneers in the adoption of these globally. The regional market is also expected to grow due to the increasing deployment of digital technologies like AI and big data analytics for more effective business operations.
In addition, organizations based in the region invest heavily in the latest digital technologies, including analytics, cloud, mobility, and social media, to stay ahead in the market. Furthermore, the growing demand for these in the retail and e-commerce industry is contributing to market growth in the region during the forecast period. Thus, such factors will drive the demand in the region, thereby driving the regional market during the forecast period.
The escalating demand for cloud-based business software, including specific software, drives market growth, particularly among small and medium-sized businesses, BFSI, and government sectors. This surge, propelled by reduced IT infrastructure costs and streamlined support and maintenance services, fosters business expansion initiatives. Cloud platforms offer scalability and cybersecurity advantages, catering to diverse organizational needs.
Moreover, Joint Purpose Agreements (JPA) facilitate collaboration between large firms, leveraging new technologies like virtual assistants and chat bots. Multi-cloud adoption enhances innovation and profitability, while automation reduces inventory costs. Integration of voluminous enterprise data enhances decision-making, supported by advancements in software development and licensing. Embracing cloud-based platforms fosters efficiency and agility, aligning with evolving business data requirements. In essence, leveraging cloud-based solutions signifies a paradigm shift towards efficiency, innovation, and profitability in the contemporary business landscape.
Increasing demand for cloud-based business software is the key factor driving market growth. The surge in demand is predominantly due to the lower upfront costs and less implementation time. Furthermore, the cloud-based model eliminates the need for the procurement and installation of hardware. Cloud-based systems are also capable of providing various other business benefits, such as process alignment and business consistency across an organization and access to applications by users, employees, and partners from anywhere and any place.
Furthermore, the deployment of cloud-based systems provides new opportunities to enterprises by leveraging technologies such as mobility, AI, and IoT. In addition, the adoption of cloud-based products and services is growing rapidly, owing to their cost benefits and scalability. Major market players that have technological expertise are offering different business software and services based on the cloud to the retail sector. Therefore, the increased focus of end-users on adopting cloud-based solutions is expected to drive the growth of the market during the forecast period.
Integration of Artificial Intelligence (AI) into business application software is the primary trend shaping market growth. AI is a computer science that uses algorithms, pattern matching, rules, deep learning, and cognitive computing to approximate conclusions without direct human inputs. The use of AI is increasing due to its ability to improve productivity and provide accurate results within a short period. Integrating IT with AI and machine learning allows end-users to analyze and extract useful data insights from a large number of data sets, which are useful in the decision-making process.
Furthermore, integrating CRM with AI enables enterprises to obtain meaningful insights from their customer-related data, which can be used in automating and personalizing customer services. Also, there is a growing integration of AI in other applications across enterprises, such as supply chain management, business process management, and business intelligence, to enhance business productivity. Hence, the increasing use of AI-enabled software applications is expected to drive the growth of the global market during the forecast period.
Implementation challenges associated with business software and services is a challenge that affects market growth. They are a significant and integral part of an organization, as they have a significant influence on its operational efficiency. However, end-users need to implement their digital platform on a standard enterprise IT infrastructure. The challenges associated with such integration include those arising from the architecture of the system, the age of the system (in legacy systems), and the need for integrating new software applications.
Moreover, implementation is performed in a standardized, step-by-step procedure by designing the process and aligning functional modules to the company applications and requirements, which mostly results in a longer time than the stipulated timeline. The system architecture can be a challenge while integrating software with the rest of the systems, which, in turn, will impede the growth of the market in focus during the forecast period.
Market forecasts include the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
The market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Business Software Services Market caters to a diverse clientele, from small and medium-sized businesses to large firms across various sectors like BFSI (Banking, Financial Services, and Insurance). It offers comprehensive solutions ranging from enterprise software and services to human resources, support and maintenance segment, and managed services.
Incorporating Epicor Kinetic software and Robotic Process Automation (RPA), businesses streamline operations in finance, marketing, and customer service with virtual assistants and chat bots. The shift towards multi-cloud environments emphasizes the importance of cybersecurity and data protection, ensuring secure transactions and safeguarding client databases.
As companies navigate through new technologies and innovation, they seek cloud-based platforms and automation solutions to optimize profitability and manage inventory costs. The market witnesses growth through business expansions, collaborations, and new product development, fueled by technological advancements and strategic agreements.
With a focus on real-time data compilation and complex analytical engines, businesses leverage process blueprints to drive efficiency and scalability. Support and maintenance services ensure smooth operations, encompassing system modification, upgradation, and data backup to meet evolving business data needs.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
The market caters to a wide range of industries, including the BFSI industry, government sector, and IT & telecom segment. These services encompass financial management tools, support and maintenance, and consulting services.
Smartphone applications play a vital role in delivering services to end-users, especially in the SME category and large enterprise segment. Companies are increasingly adopting cloud services and hybrid cloud deployment models for on-premise deployment to enhance flexibility and scalability. In Singapore, initiatives like the Better Data-Driven Business program (BDDB) supported by the Infocomm Media Development Authority and Personal Data Protection Commission, Singapore (PDPC) are driving the adoption of cloud platforms and enterprise data solutions. As businesses seek to expand, they are investing in managed services segment and business expansion initiatives to stay competitive in the market. The market continues to evolve, offering innovative solutions to meet the diverse needs of end-use industries such as retail, manufacturing, healthcare, and transportation.
The global business software and services market is experiencing a surge driven by innovative technologies like blockchain, hybrid architecture, artificial intelligence, and machine learning. Within this landscape, segments such as human resources, support and maintenance, managed services, consulting services, and BFSI are witnessing significant growth. Companies are leveraging these technologies to streamline operations, enhance security, and improve efficiency. In particular, the BFSI segment is adopting advanced software solutions to meet evolving regulatory requirements and customer demands. With ongoing advancements and a focus on tailored solutions, the market anticipates continued expansion across diverse sectors.
Business Software Services Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.23% |
Market Growth 2024-2028 |
USD 163.56 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
10.41 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
APAC at 33% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Acumatica Inc., Binmile Technologies Pvt Ltd., Comarch SA, Condeco Group Ltd., Epicor Software Corp., IBS Software, International Business Machines Corp., Johnson Controls International Plc, Microsoft Corp., Oracle Corp., Orient Software Development Corp., OverIT Spa, Planon Shared Services BV, PTC Inc., Sage Group Plc, Salesforce Inc., SAP SE, SLK Software Pvt. Ltd., and Yardi Systems Inc. |
Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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