Software - Eastern Europe

Eastern Europe

Revenue in the Software market is projected to reach US$9.19bn in 2024.
Enterprise Software dominates the market with a projected market volume of US$3.79bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 22.27%, resulting in a market volume of US$20.54bn 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 Software market in Eastern Europe has been experiencing significant growth in recent years, driven by a combination of factors such as increasing demand for software solutions, the rise of digitalization, and the region's growing IT talent pool.

Customer preferences: Customers in Eastern Europe are increasingly looking for software solutions that can help them streamline their operations, improve productivity, and reduce costs. As a result, there is a growing demand for software products that offer automation, data analytics, and cloud-based services. Additionally, customers are becoming more discerning, seeking out software solutions that are user-friendly, customizable, and scalable.

Trends in the market: One of the key trends in the Eastern European software market is the growth of the IT outsourcing industry. Many companies in Western Europe and North America are turning to Eastern Europe for software development services due to the region's highly skilled IT workforce and lower labor costs. Another trend is the rise of software startups, particularly in countries like Poland, Ukraine, and Romania. These startups are leveraging the region's growing IT talent pool to develop innovative software solutions that are gaining traction both locally and globally.

Local special circumstances: One of the unique characteristics of the Eastern European software market is the presence of a large number of small and medium-sized software development companies. These companies often specialize in niche areas and offer highly customized software solutions. Additionally, the region's history of political and economic instability has resulted in a highly resilient and adaptable software industry that is able to weather economic downturns and adapt to changing market conditions.

Underlying macroeconomic factors: Several macroeconomic factors are driving the growth of the software market in Eastern Europe. One of the key factors is the region's growing IT talent pool, which is fueled by a high-quality education system and a strong culture of innovation. Additionally, the region's relatively low labor costs compared to Western Europe and North America make it an attractive destination for IT outsourcing. Finally, the rise of digitalization and the increasing importance of software in all areas of business are creating a favorable environment for the growth of the software market in Eastern Europe.

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.