Software - Africa

Africa

Revenue in the Software market is projected to reach US$8.62bn in 2024.
Enterprise Software dominates the market with a projected market volume of US$3.60bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 7.47%, resulting in a market volume of US$11.50bn by 2028.
In global comparison, most revenue will be generated in the United States (US$353.50bn in 2024).

Key regions: United States, Canada, Germany, China, Japan

Definition:

In general, software is defined as a set of instructions written as programming code to execute specific tasks on a computing device. The Software market covers a wide range of software products and solutions that are publicly sold by various companies. Most software solutions in this market are designed for professional use, but some can also be suitable for personal use. They can also range from basic productivity tools such as word processors and spreadsheets to complex software solutions such as project management tools, graphic design software, and enterprise resource planning software.

Products in the Software market can be obtained in two ways: as on-premises software that is sold via a transactional license or a subscription and as cloud-based software (software as a service/ SaaS) that is most frequently sold as a subscription.

Structure:

The market contains four markets that are based on the functionality of the software:

Productivity Software refers to application software that supports activities such as producing documents, spreadsheets, drawings, and presentations. This market includes Administrative Software, Collaboration Software, Office Software, Creative Software, and Construction and Design Software.
Enterprise Software refers to all software that supports essential large-scale business activities such as enterprise resource management, customer management, and supply chain activities. This market includes Enterprise Resource Planning Software, Customer Relationship Management Software, Business Intelligence Software, Supply Chain Management Software, Content Management Software, and Other Enterprise Software.
Application Development Software refers to software and tools that help the overall application development process.
System Infrastructure Software refers to software that provides the base framework for operating and managing organizational processes and services on hardware devices.

Additional Information:

The Software market comprises revenue and revenue change as the key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in this market include Microsoft, Adobe, SAP, Oracle, and Salesforce.

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Market

Region

Region comparison

Currency

Analyst Opinion

The demand for software in Africa has been on the rise in recent years, driven by several factors such as the increasing adoption of technology, the growth of e-commerce, and the need for digital solutions in various industries.

Customer preferences: Customers in Africa are increasingly looking for software solutions that are affordable, user-friendly, and can cater to their specific needs. There is also a growing demand for cloud-based software solutions that can be accessed from anywhere, as well as mobile applications that can be used on smartphones. Additionally, customers are looking for software that can help them improve their business processes and increase efficiency.

Trends in the market: In Nigeria, the software market is experiencing significant growth due to the increasing adoption of technology in various industries such as banking, healthcare, and education. The country has a large population and a growing middle class, which has led to an increase in demand for software solutions that can cater to their needs. Additionally, the government has been supporting the growth of the software industry through initiatives such as the National Software Policy and the establishment of software technology parks.In South Africa, the software market is also growing, driven by the need for digital solutions in various industries such as finance, healthcare, and retail. The country has a well-developed IT infrastructure and a large pool of skilled software developers, which has made it an attractive destination for software companies looking to expand their operations in Africa. Additionally, the government has been promoting the growth of the software industry through initiatives such as the National ICT Policy White Paper and the establishment of a fund to support the development of local software companies.

Local special circumstances: One of the challenges facing the software market in Africa is the lack of access to funding for software startups. Many software startups struggle to secure funding due to a lack of venture capital firms and angel investors in the region. Additionally, there is a shortage of skilled software developers in some countries, which has made it difficult for software companies to find the talent they need to grow their operations.

Underlying macroeconomic factors: The growth of the software market in Africa is being driven by several underlying macroeconomic factors such as the increasing adoption of technology, the growth of e-commerce, and the need for digital solutions in various industries. Additionally, the region has a large and growing population, which has created a significant market for software companies. However, there are also challenges such as the lack of access to funding for software startups and a shortage of skilled software developers in some countries. Overall, the software market in Africa is poised for continued growth in the coming years, driven by the increasing demand for digital solutions across various industries.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises, except for the Enterprise Software segment, in which consumer (B2C) spending is not considered. Figures are based on the allocation to the country where the money was spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, level of digitization, GDP sector composition, and observed level of software piracy. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.