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The outsourced software testing market size is estimated to grow by USD 30.46 billion at a CAGR of 14.41% between 2023 and 2028. The increased demand for mobile and web applications is driven by the growing use of smartphones and the internet, which has led to a greater need for mobile-friendly and online solutions. The increasing demand for cost-effective solutions is prompting businesses to seek out efficient and affordable software solutions, including mobile and web applications. The rise in the adoption of digital transformation initiatives across various industries is driving the need for innovative and technology-driven solutions, further fueling the growth of the market for mobile and web applications.
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The market share growth by the outsourced embedded software testing segment will be significant during the forecast period. Embedded software is integral to a broad range of devices and systems, serving critical functions in industries such as automotive, healthcare, consumer electronics, aerospace, and industrial automation. As the complexity and connectivity of embedded systems continue to grow, the need to ensure reliability, safety, and performance becomes increasingly vital.
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The outsourced embedded software segment was the largest and was valued at USD 15.12 billion in 2018. The segment encompasses the verification and validation of firmware, device drivers, communication protocols, and system integration aspects. The active involvement of these specialists enables organizations to identify and rectify potential issues early in the development lifecycle, leading to improved product quality and accelerated time-to-market for embedded systems. In addition, the segment often extends to areas such as Internet of Things (IoT) device firmware, medical device software, industrial control systems, and consumer electronics. Thus, the above-mentioned factors are expected to drive the segment in the global market during the forecast period.
The BFSI holds a significant position in the global market, reflecting the critical need for comprehensive services within this industry. As financial institutions and insurance companies continually modernize their technology infrastructure and introduce new digital offerings, the demand for efficient and high-quality solutions has surged within the BFSI sector. Moreover, the BFSI sector demands a rigorous approach to security, encompassing vulnerability assessments, compliance audits, and data protection evaluations. The companies with expertise in BFSI-specific security standards and best practices offer valuable support in identifying and addressing potential cybersecurity threats within financial software applications and digital channels. Thus, the above-mentioned factors are expected to drive the BFSI segment in the market during the forecast period.
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North America is estimated to contribute 40% 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. North America holds a significant position in the global market due to the large pool of skilled IT professionals, technological innovation, and a robust regulatory environment. North American companies have been at the forefront to increase operational efficiency, reduce costs, and access specialized expertise. With a focus on quality, security, and compliance, North American firms have demonstrated a strong preference for these to meet their business objectives. One of the primary reasons for North America's prominence in the global market is the presence of a vast talent pool of software professionals.
Furthermore, companies in North America continuously invest in cutting-edge tools, methodologies, and best practices allowing them to deliver superior services to their clients. This emphasis on innovation has led to the development of advanced solutions for emerging technologies such as AI, IoT, blockchain, and cloud computing. Thus, such factors are expected to increase the demand which will propel the growth of the regional market during the forecast period.
The market is driven by the need for organisations to ensure the quality of their software applications. Outsourcing testing tasks to specialised third-party service providers offers several advantages over relying solely on an internal development team. These providers offer a tactical strategy for testing throughout the software development life cycle, leveraging their worldwide talent pool of testing specialists with the necessary skill sets and core capabilities. The market is booming as companies seek to ensure their software structures are robust and reliable. With the rise of online and mobile applications, there is a growing demand for comprehensive and stringent testing under various network circumstances. Leveraging cutting-edge infrastructure and specialized testing human resources, software testers employ automation tools and advanced testing methodologies to adhere to industry best practices. Services encompass unit testing, integration testing, end-to-end functionality testing, system testing, and load and stress testing, ensuring compatibility with platforms like Microsoft Windows. This holistic approach guarantees the reliability and performance of applications, mitigating risks and enhancing user satisfaction.
Increased demand for mobile and web applications is notably driving the market. The global market is witnessing a substantial increase in demand for mobile and web applications, driven by several factors. These include the widespread adoption of smartphones, a growing reliance on digital platforms for various activities, and the increasing complexity of software architectures. To ensure the seamless functioning, security, and quality of their applications, companies are increasingly turning to outsourced providers offering cloud-based testing solutions and services. This approach provides scalability, flexibility, and affordability, allowing companies to meet their testing needs efficiently.
One of the main drivers behind this demand is the necessity for comprehensive testing of mobile applications across diverse devices, operating systems, and network conditions. Companies leveraging these services benefit from an agile and scalable testing approach, along with access to specialized talent and advanced infrastructure. This includes usability testing, performance testing, and security testing, ensuring that their applications meet high standards for functionality and reliability. This allows them to expedite their time-to-market, reduce testing expenses, and maintain a competitive edge in the rapidly evolving mobile and web application development landscape. These factors are anticipated to drive market growth in the foreseeable future.
Technological advancements are an emerging trend shaping the market. Technological advancements in the global market have revolutionized the landscape of software quality assurance, enabling these providers to deliver more efficient, comprehensive, and precise solutions. These innovations have significantly enhanced the capabilities, empowering organizations to achieve superior quality and reliability in their software products. The evolution of these platforms has ushered in a new era of scalability and flexibility. A multinational software development company engaged an outsourced testing provider to ensure the flawless performance of its cloud-based enterprise application.
Additionally, the integration of advanced analytics and big data technologies has empowered outsourced testing providers to extract actionable insights from vast volumes of data. A healthcare technology firm entrusted the testing of its patient management software to a specialized companies. By employing big data analytics, the outsourced provider analyzed intricate patterns in the results, enabling the identification of potential usage trends, performance anomalies, and areas for optimization within the software. Thus, such factors are expected to fuel the market during the forecast period.
Data security and privacy concerns a significant challenge hindering the market. Data security and privacy concerns have had a detrimental impact on the global market. The rising awareness and emphasis on protecting sensitive data have led to increasingly stringent requirements, especially for companies that outsource these services. In addition, high-profile data breaches and privacy scandals have further amplified these concerns. For instance, the widely publicized incidents involving large corporations have heightened the fear of potential data breaches through third-party companies, causing companies to reconsider their outsourcing strategies. As a result of these factors, the market has experienced a decrease in demand, impacting the revenue and growth prospects of service providers in this industry.
However, to counter these challenges, companies in the this space are now compelled to invest heavily in robust data security measures, obtain relevant certifications, and demonstrate a comprehensive understanding of data privacy regulations to regain the trust of potential clients. Thus, such factors are expected to hinder the market during the forecast period.
The Market report includes the adoption lifecycle of the market, 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 growth 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.
Accenture Plc - The company offers Accenture myWizard used for automated and touchless engineering testing.
Atos SE - The company offers the Atos digital assurance platform used for natural language processing and machine learning testing.
Capgemini Service SAS - The company offers Sogeti TMap, TMap NEXT, TPI and TPI used for quality assurance QA testing services.
The market research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
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 market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Software Testing Services Market: Software Testing Services Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, UK, Germany, Japan - Size and Forecast
ANZ - Software Testing Services Market: ANZ - Software Testing Services Market by Product and End-user - Forecast and Analysis
Outsourced Semiconductor Assembly And Test (OSAT) Market: Outsourced Semiconductor Assembly And Test (OSAT) Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, China, Taiwan, South Korea, Japan - Size and Forecast
The market has experienced a significant spike as companies aim to ensure the quality of software amid the rapid development of software and increasing digitalization. Utilizing automation testing and artificial intelligence (AI), businesses achieve cost-effective operations while adhering to stringent regulatory compliances. The IT sector drives this trend, particularly through mobile app testing, functional testing, and cross-browser testing. The economic slowdown and supply and chain disruptions have further highlighted the need for specialized testing services. Primary and secondary research reveal that outsourcing to third-party and independent teams provides efficiency in testing tasks, reducing time and cost. This trend is expected to continue during the forecasting period, fueled by merger and acquisitions activities and technological advancements in hardware and software deployment.
Furthermore, the market has evolved significantly, driven by Agile and DevOps practices and the rise of cloud-based testing services. Despite disruptions, the market has surpassed pre-pandemic levels due to robust process and planning. Key drivers include the demand for high-quality results and customer satisfaction. The integration of latest trends and advancements in technology has fostered strategic collaborations with third-party agencies and independent teams. Localization testing and urbanization are expanding the market, while restraining factors like complex understanding remain. Specialized software testing teams ensure thorough testing procedures both on company premises and off-site. The development of various software in emerging countries highlights the necessity of skilled software testing professionals to meet customer requirements. Region analysis shows highest revenue share from well-established outsourcing companies in the computer and software industry applications.
Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 14.41% |
Market Growth 2024-2028 |
USD 30.46 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
13.44 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 40% |
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, Amdocs Ltd., Assystem S.A., Atos SE, Capgemini Service SAS, CGI Inc., Cigniti Technologies Ltd., Cognizant Technology Solutions Corp., HCL Technologies Ltd., Hewlett Packard Enterprise Co., Hexaware Technologies Ltd., Infosys Ltd., International Business Machines Corp., Larsen and Toubro Ltd., QASource, Sutherland Global Services Inc., Tata Consultancy Services Ltd., Tech Mahindra Ltd., Thinksoft Global Services Inc., and Wipro Ltd. |
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, and Market condition analysis for the market forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
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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