INDEPENDENT SOFTWARE VENDORS (ISVS) MARKET ANALYSIS

Independent Software Vendors (ISVs) MarketSize and Trends

The global independent software vendors (ISVs) market size is estimated at US$ 1,553.6 Million in 2023 and is expected to reach US$ 5,653.6 million by 2030, growing at a compound annual growth rate (CAGR) of 20.3% from 2023 to 2030.

Independent Software Vendors (ISVs) Market Drivers:

• Increasing Demand for Software Solutions: The growing need for software solutions across industries is a significant driver for the ISV market. Businesses are increasingly relying on software to streamline their operations, improve efficiency, and gain a competitive edge. This demand fuels the growth of ISVs, as they develop and provide specialized software products and services to meet industry-specific requirements. As per World Bank data, the information and communication technology services exports from developing countries increased from US$49 billion in 2015 to US$78 billion in 2020.
• Digital Transformation Initiatives: Digital transformation has become a priority for businesses globally. Companies are adopting technologies such as cloud computing, artificial intelligence (AI), Internet of Things (IoT), and data analytics to drive innovation and enhance their processes. ISVs play a crucial role in supporting digital transformation efforts by developing software solutions that leverage these technologies, enabling businesses to stay competitive in the digital age. A (United Nations Educational, Scientific and Cultural Organization) UNESCO report from 2022 highlights how educational technology providers saw 50% increase in users for their virtual learning and assessments platforms in 2021 as online education grew exponentially due to school closures amid the pandemic.
• Industry-Specific Software Needs: Different industries have unique software requirements to address their specific challenges and comply with industry regulations. ISVs specialize in developing software solutions tailored to meet these industry-specific needs. Whether it's healthcare, finance, manufacturing, or retail, ISVs create software that addresses the complexities and demands of each sector, driving market growth. According to United Nations Department of Economic and Social Affairs report 2022, the manufacturing sector's share in global GDP has increased to around 16% in 2021 from 15% in 2019, indicating strong recovery of the sector post pandemic disruptions.
• Cloud Computing and Software as a Service (SaaS): The rise of cloud computing and the adoption of Software as a Service (SaaS) delivery models have significantly impacted the independent software vendors (ISVs) market. Cloud-based solutions offer scalability, flexibility, and cost-effectiveness, making them attractive to businesses of all sizes. ISVs are leveraging cloud platforms to develop and deliver software solutions, allowing businesses to access and utilize software applications easily. In July 2022, TD SYNNEX launched the most inclusive and comprehensive Independent Software Vendor (ISV) experience available in the market. The ISV experience is designed to help accelerate SaaS opportunities.

Independent Software Vendors (ISVs) Market Trends:

• Cloud Computing and SaaS Adoption: Cloud computing and the Software as a Service (SaaS) model have become increasingly prevalent in the software industry. ISVs are shifting from traditional on-premises software to cloud-based solutions, allowing customers to access software applications and services remotely. This trend offers benefits such as scalability, flexibility, and cost-efficiency for both ISVs and their customers. For Instance, In July 2021, Microsoft launch of Azure ISV Connect, a program aimed at helping ISVs accelerate their cloud business growth on the Microsoft Azure platform.
• Emphasis on User Experience (UX): User experience has become a critical factor in software adoption and customer satisfaction. ISVs are focusing on creating intuitive and user-friendly interfaces, optimizing performance, and delivering seamless experiences across multiple devices and platforms. Providing a positive user experience is key to gaining a competitive edge in the market.
• Integration and Interoperability: Businesses require software solutions that seamlessly integrate with other systems and applications. ISVs are emphasizing interoperability, providing APIs and integration capabilities to enable smooth data exchange and workflow automation. Integration with popular platforms and systems enhances the value proposition of ISV offerings. According to an analysis by the Linux Foundation published in 2021, more than 6,600 companies are contributing to the Linux kernel emphasizing the thriving ecosystem around this platform.
• AI and Machine Learning Integration: Artificial intelligence (AI) and machine learning (ML) technologies are increasingly being integrated into software solutions. ISVs are leveraging AI and ML to automate processes, enable intelligent data analysis, and deliver personalized experiences. AI-powered features such as chatbots, recommendation engines, and predictive analytics are becoming common in software applications. According to a survey by Anthropic in 2021 of 300 ISV executives, 91% agreed that AI will be essential to the products and services they offer in the next 3 years. The study also found that 63% of ISVs planned to adopt or develop AI-based solutions in 2022, with customer experience and personalized offerings being the top business priorities.