Software - Israel

Israel

Revenue in the Software market is projected to reach US$3.57bn in 2024.
Enterprise Software dominates the market with a projected market volume of US$1.50bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 5.00%, resulting in a market volume of US$4.34bn 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.

For more information on the displayed data, use the info button right next to the boxes.

Market

Region

Region comparison

Currency

Analyst Opinion

Israel, a small country in the Middle East, has been making waves in the global technology industry. The country has the highest number of startups per capita in the world and is often referred to as the "Startup Nation." The software market in Israel has been rapidly developing in recent years, driven by various factors.

Customer preferences: Customers in Israel have been increasingly demanding software solutions that are innovative, efficient, and cost-effective. With the rise of digitalization, there has been a growing need for software products that can help businesses automate their processes and improve their productivity. Additionally, there has been a shift towards cloud-based solutions, which offer greater flexibility and scalability.

Trends in the market: One of the key trends in the software market in Israel is the focus on cybersecurity. Israel is known for its expertise in this area, and many Israeli software companies specialize in developing cybersecurity solutions for businesses. Another trend is the rise of artificial intelligence (AI) and machine learning (ML) technologies. Israeli startups have been at the forefront of developing these technologies, which have numerous applications in various industries, including healthcare, finance, and retail.

Local special circumstances: Israel's unique geopolitical situation has played a significant role in the development of its software market. The country has a highly educated workforce, with many engineers and scientists working in the technology industry. Additionally, Israel has a strong culture of entrepreneurship, which has led to the creation of many startups and innovative software solutions. The government has also been supportive of the technology industry, providing funding and other incentives to encourage innovation.

Underlying macroeconomic factors: Israel's strong economy has also contributed to the growth of its software market. The country has a highly developed infrastructure and a well-educated workforce, which has attracted many multinational companies to establish a presence in Israel. Additionally, Israel has a free-market economy, which has encouraged competition and innovation in the technology industry. The country's close ties with the United States have also been beneficial, as many Israeli software companies have been able to tap into the US market.

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.