Software - EU-27

EU-27

Revenue in the Software market is projected to reach US$99.67bn in 2024.
Enterprise Software dominates the market with a projected market volume of US$41.42bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 3.91%, resulting in a market volume of US$116.20bn 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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Analyst Opinion

The Software market in EU-27 has been experiencing significant growth in recent years, driven by various factors such as increased demand for software solutions in different sectors, technological advancements, and the rise of digitalization.

Customer preferences: Customers in the EU-27 Software market are increasingly demanding software solutions that are not only efficient but also user-friendly. They are looking for software that can be customized to meet their specific needs and can integrate with other systems. Additionally, customers are also looking for software that can be accessed remotely, allowing them to work from anywhere, at any time.

Trends in the market: One of the major trends in the EU-27 Software market is the increasing adoption of cloud-based software solutions. This trend is driven by the need for more flexible and scalable solutions that can be easily accessed remotely. Another trend is the rise of Artificial Intelligence (AI) and Machine Learning (ML) in software development. AI and ML are being used to develop software solutions that can automate various tasks, making them more efficient and cost-effective.

Local special circumstances: Several EU-27 countries have unique circumstances that affect the Software market. For instance, Germany has a strong focus on Industry 4.0, which is driving the adoption of software solutions that can support automation and digitalization in manufacturing. In France, there is a strong focus on developing software solutions that can support the transition to a more sustainable economy, such as energy-efficient software solutions.

Underlying macroeconomic factors: The EU-27 Software market is also influenced by underlying macroeconomic factors such as the overall economic growth of the region, the level of investment in technology, and the regulatory environment. For example, the EU's General Data Protection Regulation (GDPR) has had a significant impact on the Software market, as it has led to increased demand for software solutions that can help companies comply with the regulation. Additionally, the level of investment in technology by both the public and private sectors also affects the growth of the Software market. In conclusion, the EU-27 Software market is experiencing significant growth driven by customer preferences for more efficient and user-friendly software solutions, the adoption of cloud-based solutions, and the rise of AI and ML in software development. The market is also influenced by local special circumstances in different countries, such as a focus on Industry 4.0 in Germany and sustainable software solutions in France. Underlying macroeconomic factors such as economic growth, investment in technology, and the regulatory environment also play a significant role in the development of the Software market in EU-27.

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.