BUSINESS SOFTWARE AND SERVICES MARKET ANALYSIS

The global business software and services market size was valued at US$ 474.61 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030.  Increasing deployment of business software and services in various organizations and government sectors for better profitability, lower inventory costs, and faster decision-making fuels the growth of the global market. Moreover, the growing need for advanced IT infrastructure and high-speed data networks is expected to drive the growth of the global business software and services market.

Global Business Software and Services Market: Regional Insights

North America is anticipated to exhibit major growth in the global business software and services market over the forecast period. The region is witnessing growing demand for high-speed data networks, and robust presence of major software vendors. These factors are further leading to rise in demand for business software and services in the region, which in turn is expected to drive growth of the global business software and services market in the region.

Furthermore, Europe is projected to show significant growth in the global business software and services market over the forecast period. The rise in investments by major firms and adoption of advanced technologies in enterprises and industries in the region are primarily driving the market growth. Moreover, due to growing focus on cloud-based facilities and endeavors for developing corporate intelligence solutions, the need for enterprise solutions is increasing in the region, further driving growth of the market.

Figure 1. Global Business Software and Services Market Share (%), By Region, 2022

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Global Business Software and Services Market Drivers:

Increasing need for operational efficiency and transparency in business operations to boost the market growth

The use of business software and services is increasing rapidly in end-use industries due to their support in streamlining business processes. These solutions help large enterprises to provide quick and easy access to unstructured data gathered through data analytics methods. They also help these enterprises to achieve data security goals of a company. Moreover, implementing business management software in an enterprise offers a significant reduction in the costs of inventory and raw materials, which further helps businesses boost profitability. Thus, with rising need for operations efficiency and transparency in these operations, the demand for business software and services is increasing, which is further expected to fuel the market growth.

Rise in shift toward cloud computing to accelerate the market growth

Cloud computing technology uses remote servers and the internet for maintaining data and different types of applications. Several businesses are adopting cloud computing technology due to its advantages such as security, mobility, reduced total cost of scalability, ownership, and optimized business processes, customization, and others. The use of cloud computing technology provides scalability through which businesses can customize their computing requirements through either increasing or decreasing them depending on the market demand.

Global Business Software and Services Market Opportunities:

Various advantages such as major decrease in costs of raw materials and inventory of using enterprise solutions is creating growth opportunities in the global business software and services market over the forecast period. This further increases profitability of organizations. Several companies are using business management solutions for increasing their efficiency in operations through integration of administrative processes into a single piece of software. The modules of business solution can integrate departmental data to real-time updates, which further improves the data transparency.

Growing applications in healthcare industry is expected to offer multiple growth opportunities in the global business software and services market over the forecast period. The demand for improved outcomes and cost-efficiency of supply chain and human resource management software solutions is increasing in the healthcare sector. As a result, demand for supply chain and human resource management software is increasing in hospitals. This is further creating major growth opportunities in the global market.

Global Business Software and Services Market Trends:

Rise in adoption of growth strategies by market players is a major trend

The demand for mobility and data portability is increasing leading to need for data-centric solutions and software for businesses. Thus, market players are increasingly engaging in various growth strategies such as product launch, collaborations, contracts, and merger and acquisition to gain competitive edge in the market. For instance, in October 2022, Epicor introduced various novel features in its Epicor Kinetic software, a cloud-based industry ERP software solution for manufacturing sector.

Increasing adoption of cloud services is trending in the market

The use of cloud services has become widespread all over the world due to no longer need for manual software upgrades, and as it offers easy access to data from remote locations to clients. These services offer businesses to operate with higher efficiency with lesser energy consumption, as they make use of only the required resources. Thus, this trend is likely to continue in the global business software and services market over the forecast period.

Global Business Software and Services Market Restraints:

High cost of licensing and support to hinder the market growth

The cost associated with licensing software includes various factors. It is mainly influenced by market conditions at the purchasing time. Software vendors offer different types of licensing, deployment, or pricing models. The licenses related to most business software solutions comprise network, user, enterprise, volume, and access. The type of license used determines the initial cost of license, and also impacts overall cost of license over the product’s lifespan, as it requires frequent updates. Thus, this factor is likely to hinder growth of the global business software and services market over the forecast period.

Complexity and operational issues of business software solutions to limit the market growth

Business management software have some drawbacks out which difficulty of using these software is a major one. Some of the software can have complex user interface and can fail to launch quickly compared to other solutions. This can be challenging for users with limited awareness regarding the technology. This factor is thus likely to impede adoption of business software and services. However, launch of innovative and user-friendly solutions by market players is likely to support the market growth in the near future.

Figure 2. Global Business Software and Services Market Share (%), By Deployment, 2022

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Global Business Software and Services Market Segmentation:

The global business software and services market report is segmented into Software, Service, Deployment, Enterprise Size, and End-Use.

Based on Software, the market is segmented into Finance, Sales & Marketing, Human Resource, Supply Chain, and Others. Out of which, Finance is expected to dominate the global market over the forecast period and this is attributed to the various benefits of financial management software solutions such as tools for budgeting, planning, analysis, and reporting. Moreover, these solutions also offer businesses with a complete suite of accounting functions for tracking their financial operations and generating annual and quarterly financial statements.

Sales & Marketing segment is also expected to witness significant growth in the near future and this is owing to the widespread use of sales and management software among businesses for combining sales procedures and tasks. These software offers businesses a detailed overview of a company’s sales team’s work in different locations, products, services, and customers. Due to its various benefits, adoption of sales and marketing management solutions is increasing, which in turn is driving growth of this segment.

Based on Service, the market is segmented into Consulting, Managed Services, and Support & Maintenance. Out of which, Consulting is expected to dominate the global market over the forecast period and this is attributed to the rise in demand for different consulting services in end-user industries to manage risks related to businesses and detecting growth opportunities.

Managed Services segment is also expected to witness significant growth in the near future and this is owing to the rise in dependence of enterprise on IT assets for improving their productivity. Along with this, managed services integrate and manage cloud as well as conventional infrastructures, which in turn drives demand for these services. This is further driving growth of the segment in the global market.

Based on Deployment, the market is segmented into Cloud and On-premise. Out of which, Cloud is expected to dominate the global market over the forecast period and this is attributed to the increasing deployment of cloud-based solutions of various business software and services. This offers various benefits such as reduced need for regularly manually upgrading these solutions, and access to data from any location with any hassle.

On-Premise segment is also expected to witness significant growth in the near future and this is owing to the increasing shift in companies from manual systems to automated systems to carry out different operations, leading to rise in demand for on-premise software. Owing to various advantages of this deployment method, the segment is likely to show steady growth in the coming future.

Based on Enterprise Size, the market is segmented into Large Enterprises and Small & Medium Enterprises. Out of which, Large Enterprises is expected to dominate the global market over the forecast period and this is attributed to the growing adoption of business software solutions in large enterprises owing to presence of large amount of data. The related processes and operations need different high-tech tools, which includes process blueprints, advanced analytical engines, and real-time data compilation tools. As a result, a rise in adoption of business software and services in these enterprises.

Small & Medium Enterprises segment is also expected to witness significant growth in the near future and this is owing to the increasing government initiatives through SMEs campaigns, such as social media marketing, video marketing, and search engine marketing. For instance, in May 2017, the Info-Communication Media Development Authority of Singapore introduced the SMEs Go Digital initiative for increasing the SMEs’ access to new technology in the region.

Based on End-Use, the market is segmented into Aerospace & Defense, BFSI, Government, Healthcare, IT & Telecom, Manufacturing, Retail, Transportation, and Others. Out of which, Aerospace & Defense is expected to dominate the global market over the forecast period and this is attributed to the increasing development of intelligent business management software solutions using real-time analytics, leading to real-time visibility into manufacturing operations, optimized inventory levels, and extended supply chain and manufacturing processes. This is further facilitating collaborations in aerospace and defense industry. Thus, the segment is likely to show substantial growth in the near future.

BFSI segment is also expected to witness significant growth in the near future and this is owing to the widespread use business software in banking and financial institutes due to its enhanced client experience. Moreover, the benefits offered by these software and services such as live tracking of operating transactions, secure transactions, and constant access to the client database.

Global Business Software and Services Market: Key Developments

In February 2020, Deltek, Inc. revealed that QueryClick, a digital marketing agency selected Deltek WorkBook and Deltek Power Launch for helping to obtain better visibility into projects, which improves reviewing processes and boosting efficiencies of business.

In August 2020, Epicor Software Corporation announced the launch of a novel DocStar Enterprise Content Management connector for ArcGIS. The new ECM acts as a conduit for ArcGIS for businesses to connected Geographic Information System spatial data and other documents in real-time.

In July 2020, International Business Machines Corporation announced, Anta Group, introduced an organization-wide digital platform based on SAP S/4HANA, an IBM Services designed and deployed platform, integrating data management from supply chain, logistics, production management, and brand sales to group finance.

In September 2020, Infor, Inc. announced to have received a contract from Cloetta for Infor CloudSuite Food & Beverage for driving innovation in its operations and support digital transformation.

Global Business Software and Services Market: Key Companies Insights

The global business software and services market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global business software and services market are Acumatica, Inc., Unit4, Deltek, Inc., Totvs SA, Epicor Software Corporation, SYSPRO, International Business Machines Corporation, SAP SE, Infor, Inc., Oracle Corporation, Microsoft Corporation, and NetSuite Inc.

*Definition: Business software allows managers to access a database of important information, such as invoices and client details. Such programs can also help to track the performance of staff and improve efficiency by automating tasks.