Software - Ukraine

Ukraine

The Software market in Ukraine is projected to generate a revenue of US$2.76bn in 2024.
The dominant segment in this market is Enterprise Software , which is expected to reach a market volume of US$1.29bn in the same year.
With an annual growth rate of 30.71% (CAGR 2024-2029), the revenue is expected to increase significantly, resulting in a market volume of US$10.53bn by 2029.
In comparison to other countries, United States is projected to generate the highest revenue of US$363.40bn in 2024.
Ukraine's software market is thriving, with a robust startup ecosystem and a skilled pool of IT professionals.

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

Software development has become a booming industry in Ukraine, with the country's IT sector growing at an impressive rate. The demand for software services has been on the rise, and Ukraine has positioned itself as a key player in the global software development market.

Customer preferences: Ukrainian software development companies have become popular with clients around the world due to their high-quality work and competitive pricing. Many clients prefer Ukrainian firms because of their ability to deliver projects on time and within budget. Additionally, the country's large pool of highly skilled developers, many of whom have advanced degrees in computer science, has made it an attractive destination for software development outsourcing.

Trends in the market: One of the most significant trends in the Ukrainian software market is the growing demand for artificial intelligence (AI) and machine learning (ML) solutions. As companies around the world look to automate their processes and gain insights from data, they are turning to Ukrainian firms to develop custom AI and ML applications. Another trend is the rise of blockchain technology, with Ukrainian companies developing solutions for a range of industries, including finance, healthcare, and logistics.

Local special circumstances: Ukraine's software industry has benefited from a range of local factors, including a well-educated workforce, a strong engineering culture, and a favorable business environment. The country's IT sector has been supported by government initiatives, including tax breaks for software development companies and investment in technical education. Additionally, Ukraine's location at the crossroads of Europe and Asia has made it an attractive destination for companies looking to outsource software development.

Underlying macroeconomic factors: The growth of Ukraine's software industry has been driven by a range of macroeconomic factors, including the country's low labor costs and favorable exchange rates. Additionally, the country's political stability and proximity to Western Europe have made it an attractive destination for foreign investment. Ukraine's software industry has also benefited from the country's large pool of highly skilled engineers, many of whom have been trained in top technical universities in the country. As the global demand for software development services continues to grow, Ukraine is well-positioned to capitalize on this trend and continue to expand its IT sector.

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.