BLOG The Global Software Development Market - Trends And Insights

The Global Software Development Market - Trends And Insights

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The global software development market is anticipated to reach $600 billion in 2021 with a compound annual growth rate (CAGR) of 12%. The global software developers tools market is expected to be worth $50 billion by the end of 2021 and is expected to grow at a CAGR of 4%.

 

Read on: What's Software Development And Why You Should Know More About It

 

The global software testing market is also likely to grow in the following years and is likely to generate $15 billion in revenue during 2020 – 2021. The market of application lifecycle management (ALM) tools is also bound to grow and reach a level of maturity. ALM tools are projected to account for $4.9 billion in annual revenue by 2020, up from $2.1 billion in 2014 when ALM technology was still immature and multiple solutions were available, Gartner reports.

Gartner also reports that open-source programming languages will become more popular among developers over the next five years, while Microsoft's .NET technology will grow in use by the end of 2021. The market research firm also expects that cloud computing will continue to be one of the main software development market drivers during 2016 – 2021, with dedicated cloud services representing 42% of all software development deals by 2021.

 

Read on: How Custom Software Development Can Help Your Business

 

The global software development market

Let’s take a look at some of the trends and insights that’ll dominate the global market of software development:

Cloud adoption will reach new heights, regardless of the industry

The pandemic has cleared most of the doubts around cloud computing and cleared the way towards largescale cloud adoption. Forrester predicts that the global public cloud IT infrastructure market would grow to a whopping $120 billion with 35% growth in 2021.

Cloud adoption helped industries on either side of the spectrum. Industries that gained due to the pandemic realized the potential of being a cloud-first organization and will expand more of their business services and processes to the cloud.

Industries that saw their demand fall due to lockdown arrangements could downscale their cloud infrastructure until the demand returns. This couldn’t have been possible if they had it on a local server.

Edge computing will return at the right time

A centralized server offers numerous advantages for database and service management. However, there are scenarios when you want your data location to be near to your customers. This could be in the case when your customers expect a real-time response from one of your services. Or perhaps you include low latency in your SLA.

Edge computing exists as long as the modern web does. However, its use has been limited until now. With the rise of connected vehicles, multiplayer gaming, IoT, smart devices, and edge AI/ML, edge computing will experience enormous growth. 5G going mainstream is also another contributing factor.

In the coming years, public cloud vendors will fight traditional CDN providers, such as telecom companies and network providers, for control of the edge computing market.

Standardization of edge computing is also on the way. State of the Edge is an initiative to make edge computing vendor neutral. Recently, State of the Edge became part of the Linux Foundation.

Multi-cloud will enter enterprises

The CIA awarded its cloud contract to multiple cloud vendors instead of a single vendor making way for multi-cloud adoption in enterprises and government. Major cloud vendors were a little hesitant to join the multi-cloud initiative for obvious reasons. However, they’re part of the initiative along with Microsoft and Google. A multi-cloud initiative is turning out to be a bigger success than the Linux foundation.

MinIO provides API compatibility with popular vendor-specific cloud services. In the coming years, there’ll be more services like MinIO to bypass vendors lock on cloud services.

Standardization of containers

An open container standard such as Kubernetes-led Container Runtime Interface (CRI) will replace Docker. CRI is a default containerization option in Kubernetes since v1.22 and Docker is deprecated.

With the evolution of containerization ecosystems and the pursuit of an open containerization standard, Docker will gradually be lost in oblivion.

 

Software development trends and the European market

In the European market, there’s a widening skill gap in the software development market and an exodus of skilled labor due to Brexit and Covid 19 are only making things worse. The European Commission reported that the region was short of approximately a million IT professionals in 2020, including software developers.

The commission predicted the shortage of IT professionals to be 500, 000 in 2017. The shortage doubling in only 3 years raises a red flag at a time when the region is experiencing unprecedented growth in a post pandemic world.

Statista reports that revenue in the European Software market is projected to reach $145,118 million in 2021 with majority of the revenue coming from enterprise software development at $56,505 million.

Revenue is expected to grow at rate of 6.62% annually and will reach $199,912 million by 2026.

 

Software development trends and the American market

According to Statista, revenue in the American software market is expected to reach $323,417 million in 2021. Enterprise software development will remain the biggest growth driver in American markets with revenue projected to reach $128,278 million in 2021.

The report projects that the annual growth rate will remain at 7.15% between 2021 and 2026, and that the revenue will reach $456,728 million by 2026.

In global comparison, most of the revenue will be generated in the US market.

 

Software development trends and the Chinese market

Since 2010, the International Data Corporation (IDC) has forecasted 12 to 14% revenue growth for China. This country is home to some of the world’s leading companies like Lenovo, Huawei, and Alibaba Group Holding Ltd. The increased availability of venture capital has made it easier for startups to get seed funding. Gartner forecasts total IT spend in China to reach $257 billion in 2013. IDC also predicts that the country will have 618 million broadband connections by the year-end, up from 540 million in 2012.

China’s IT market is expected to grow 15% in 2012, making it one of the fastest growing technology markets in the world with companies like Lenovo Group Ltd., Huawei Technology Co. Ltd., and Alibaba Group Holding Ltd driving growth. According to an IDC forecast, the total revenue for this market stood at $54 billion in 2009 but increased to $156 billion in 2010 with a compound annual growth rate (CAGR) of 26% over the next five years. The country's large population has helped increase online connectivity via mobile devices, which are expected to account for over 55% of the market by 2016.

China is likely to become the largest IT market in the Asian Pacific with revenue of $153 billion in 2011. The country’s contribution to Asian Pacific countries total IT spend was 14%, up from 13% in 2010 and 9% in 2009. In addition, China’s share of the software market will be larger than Japan and South Korea combined by 2014 as it has been growing at a significantly faster pace than those two countries over the past five years. This growth has been driven by strong PC sales that have resulted from a surge in demand for low-cost consumer electronics products such as monitors and digital TVs.

 

Software development trends and the Indian market

In India, software product exports are expected to pass $50 billion in sales in the next five years, outpacing service exports, according to NASSCOM. Software product exports grew 28% in 2020 and accounted for two-thirds of total IT BPO (Business Process Outsourcing) revenue. The largest segments were software products for financial services, banking, insurance, retail, healthcare, telecom, media, and ITeS (Information Technology Enabled Services).

As mobile applications continue to gain mass appeal, Apple's App Store is expected to top Google Play as the leading destination for users' app downloads within two years. The number of iOS apps available has grown by 38% since last year, when there were about 775,000 apps in Apple's store. Meanwhile, over 7 million Android apps were downloaded in 2019 alone.

 

Rare Crew’s software development

The software development market is expected to grow at an unprecedented rate in a post pandemic world. Rare Crew is a leading software development firm in Europe with a global clientele. We help organizations automate their business processes and services with our custom software development services.

 

 

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