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Global Software Market definition

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net (© vege /

The Global Software Market is expected to see continued growth into the foreseeable future. This growth is largely due to the constant advancements in technology, coupled with increased consumer demand.

The software market has completely changed the way that the entire world works. It allows for better communication and more productive output of work for businesses, organizations and individuals. The impact of the software industry on the global market and across a variety of industries can be monitored by the development of innovations, the technical progress, the improved productivity, and the workforce at large.

What is software?

Software is defined as any computer program or data that can be electronically stored. It is utilized by computer processors to perform a variety of tasks. Mobile software applications, also known as apps, work similarly to the counterparts that are used in computer software. These apps are specifically designed to perform specific tasks, such as playing games, shopping, playing music, or finding directions.

Projected Growth of the Global Software Market

The global revenue for software was estimated to be worth $407.3 billion US dollars in 2013. That’s an increase of 4.8 percent from 2012, when the estimated value was $388.5 billion US dollars. By the end of 2017, this industry is expected to be valued at $3.5 trillion US dollars.

Factors Driving the Growth of the Global Software Market

The largest factor that is driving the growth of the global software market is the development of software itself. Several companies continue to invest in research and development. Consumers are constantly demanding new developments, and developers want to ensure that they are meeting their demands, as well as certify their position in the market. Spending on software is projected to increase by 7.2 percent in 2017, reaching an estimated $357 billion US dollars.

The information technology (IT) segment is also contributing to the growth of this industry. Again, the increased demand from consumers is leading companies to constantly evolve the technologies so that they can stay on the cutting-edge and ensure they are meeting customer demands. By the end of 2017, spending on IT services is expected to grow by 4.8 percent, reaching an estimated $943 billion US dollars. 

Other factors that are driving the projected compound annual growth of the global software market include:

  • More intense automation of workflow. This will involve shifting investments into the creation and building of apps that automate workflows and coordinating resources around them.
  • The growth of small and midsized businesses. These businesses haven’t penetrated this market as much as they should, and software providers can help to engage consumers by offering products that solve the challenges they face, allowing their businesses to run more effectively.
  • Artificial intelligence (AI) is also adding to the increased growth rate of the global software market. Automated vehicles, speech recognition and automated image recognition are all making use of automated intelligence, and the need for these products is growing at a rapid rate.

Key Players in the Global Software Market

There are several entities that act as key players in the global software market. The most notable entity has been Microsoft, and the organization is expected to continue being a key player in this industry into the foreseeable future.

Statistic: Global market share of application infrastructure and middleware (AIM) software vendors from 2011 to 2015 | Statista
Find more statistics at Statista

Software industry investments

There are several exchange-traded funds that currently invest in software and technology stocks. One of the most popular options for investment is SPDR Technology Select Sector Fund, who holds Apple, Microsoft and Verizon Communications. Vanguard Information Technology Index Fund is another popular option. This company invests in Oracle, IBM Corps and Microsoft. The iShares Dow Jones US Technology Sector Index Fund is also popular for investing; their top holding include Microsoft, Apple and Oracle.

Landscape of the Global Software Industry

The global software market is highly concentrated. There are a small collection of layers that head this industry’s holdings. For instance, Microsoft leads the personal computer market, heads the customer relationship management sector, and SAP AG is at the helm of the enterprise application software segment.

The effects of networks

Organizations like to create and deploy the application and information systems that they create into an environment that boasts a strong network of supporting infrastructure, as well as a large customer base. The result is minimized compatibility with maximum portability.

Customization and standardization

All computers need operating systems. These operating systems are standardized across all platforms in order to make them appealing to the mass market. Makers of computers that would rather maintain compatibility through several operating systems are the key customers of operating systems. Compatibility certifies an easy exchange of data. This means that there only a select few operating systems that lead the landscape. This gives these companies great leveraging power for pricing.

Global Software Market Growth According to Region

Several regions play an instrumental part in the growth of the global software market. In 2016, North and South America was responsible for the largest market share. It is believed that this region will continue to lead the market for the next few years. Banking and telecom sectors made up a large portion of the demand for using services in this region. Moreover, the increased consumer growth of data services and location-based applications in the telecom sector primary driver for growth.

Benefits for Investors

Given the consistent rise in value of the Global Software Market to-date, and the projected increase in the value of this industry, it is safe to say that investing in this market would be wise. Though there is never 100 percent certainty in regard to investing, the history of this industry and the predictions for the future indicate that putting money into the global software market would likely be an excellent option.

An investment in this industry stands to be quite lucrative. The demand for the products offered by this industry is constantly growing, and that growth doesn’t seem to be slowing down any time soon. Therefore, an investment in this industry will likely prove to be quite valuable. 

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