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The independent software vendors market size is forecast to increase by USD 2,058.15 billion, at a CAGR of 14.73% between 2023 and 2028. A key factor fueling market expansion is the increasing volume and complexity of enterprise data. This trend is driven by the rise of the cloud computing market and the rising adoption of advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI). A primary trend influencing market growth is the increasing adoption of cloud computing by end-users. The cloud computing market's expansion is leading to an escalating amount of data being generated, which in turn is driving the demand for robust data analytics and storage solutions. The Internet of Things (IoT) and artificial intelligence (AI) are also significant contributors to the growing volume and complexity of data. These technologies generate vast amounts of data, which must be processed and analyzed to derive meaningful insights. Government agencies and corporations are increasingly utilizing software as a service (SaaS) for various applications, including authentication processes, video management, biometric data storage, logistics services software, and big data computing. Moreover, the adaptability and scalability of cloud-based solutions enable organizations and governments to address their evolving requirements with productivity tools and mobile applications that integrate AI and machine learning (ML).
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The independent software vendors market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segment
The on-premises segment is projected to experience substantial expansion throughout the forecast period. A growing number of independent software vendors (ISVs) are opting to deliver their software solutions via the on-premises model. This approach allows organizations to host software applications within their own premises, utilizing their existing computer systems. The financial commitment for on-premises software is typically a one-time license fee, making it an attractive option for businesses seeking control over their IT infrastructure.
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The on-premise segment was the largest segment and was valued at USD 912.99 billion in 2018. On-premises software allows organizations to retain control over their data, enhancing their data security. A significant number of on-premises software solutions are open source, enabling organizations to customize the software to meet their unique requirements. This segment caters to large technology companies handling highly sensitive data, who prefer the added security and customization capabilities of on-premises software. However, the high initial investment in hardware and ongoing maintenance costs act as barriers to adoption for many organizations. Despite these challenges, the benefits of on-premises software are driving its growth and, in turn, fueling the expansion of the independent software vendors market.
The software segment is experiencing significant growth due to the widespread adoption of cloud-based solutions among businesses. Companies are seeking ways to deliver greater value to their customers while enhancing internal operations support and business support, all while reducing costs and complexity. Furthermore, organizations are prioritizing the digitalization of processes and systems through innovative digital platforms, thereby driving demand for various software solutions such as operations support business support (OSS BSS) software. This trend is propelling the expansion of the independent software vendors market during the forecast period. Organizations are increasingly recognizing the importance of digital transformation in enhancing their business operations and competitiveness. As a result, they are investing in software solutions to streamline processes, improve efficiency, and gain a competitive edge. The growing focus on digitalization is fueling the demand for software, which in turn is driving the growth of the independent software vendors market.
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North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio's industry analysts have delved deep into the market outlook, shedding light on the regional trends and key factors propelling the market's expansion in North America throughout the forecast period. Small and medium enterprises (SMEs) in North America are increasingly opting to collaborate with e-commerce platforms and integrating with other online applications, such as automated bank feeds and automated billing solutions. This trend is expected to significantly increase the demand for software developed by ISVs. Furthermore, ISV-developed business software has emerged as a preferred solution for managing a company's finances due to its ability to efficiently manage account payables, account receivables, business payroll, and general ledger, among other essential business modules. Consequently, these factors are fueling market growth in North America during the forecast period.
The independent software vendors (ISV) market is experiencing significant growth due to the increasing volume of business data, leading to a demand for software solutions tailored to address industry-specific challenges. A notable trend in this sector is the rising adoption of cloud computing by organizations, enabling scalability and flexibility through infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS). However, the industry encounters challenges such as high licensing and support costs, making it difficult for startups and small businesses to enter the market. ISVs cater to the expanding needs of multinational corporations and startups, offering enterprise applications, productivity tools, and industry-focused software in sectors like BFSI, retail & e-commerce, IT & telecom, finance, and automotive. With the increasing reliance on web-based services and cloud technologies, ISVs assume a pivotal role in delivering technical support, training, and innovative solutions to boost efficiency and growth. Guided by market growth analysis, ISVs maneuver through industry dynamics to seize emerging opportunities and tackle challenges effectively.
One significant factor propelling market expansion is the escalating volume of enterprise data. The escalating volume and intricacy of generated data are driven by the burgeoning mobile data traffic, cloud computing traffic, and the expanding implementation of technologies such as IoT and artificial intelligence (AI) worldwide. Furthermore, every click, swipe, share, search, and stream generates data, necessitating advanced big data analytics and storage solutions globally.
Additionally, the proliferation of IoT-connected devices worldwide has resulted in the generation of vast amounts of data. Moreover, the growing adoption of connected automobiles, smart homes, healthcare, and cities has contributed to an increase in the data collected by these devices. Consequently, these factors are positively influencing the ISV market's growth trajectory throughout the forecast period.
In the current business landscape, the market is experiencing significant growth due to the rising adoption of cloud computing by organizations and governments. Cloud-based software solutions such as cloud computing are increasingly being utilized for various applications such as authentication processes, video management, biometric information storage, and big data computing. The flexibility and scalability of these solutions enable organizations to effectively meet their evolving needs.
Furthermore, the proliferation of IoT-connected devices worldwide has led to an exponential increase in data generation. The adoption of connected cars, homes, health systems, and smart cities has significantly contributed to this data growth. Additionally, numerous industries, including manufacturing, utilities, retail, automotive, and social media, are leveraging IoT for enhanced data transfer. Consequently, these trends are propelling the growth of the independent software vendors market throughout the forecast period.
Independent software vendors (ISVs) have faced significant challenges in their market growth due to escalating costs associated with licensing and support. Originating as service providers, ISVs have evolved into a product-centric industry, and are now transitioning into a hybrid model that combines both products and services. Similarly, the software licensing and maintenance sector has shifted towards a hybrid orientation.
Historically, single-user and concurrent-user licensing models were the conventional choices for corporate applications. However, concurrent user licensing is gradually losing favor, and usage-based licensing is gaining traction. Perpetual licensing continues to be the preferred strategy for many ISVs. These shifts have led to increased licensing and maintenance costs, which will negatively impact the market expansion for ISVs throughout the forecast period.
The independent software vendors market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the independent software vendors market analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The independent software vendors market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
In today's rapidly advancing technological world, independent software vendors (ISVs) play a crucial role in providing innovative software solutions such as company management software to a wide range of industries. From enterprise applications to sector-specific software, ISVs cater to the unique needs of startups to Fortune 500 companies. With the emergence of cloud technologies like infrastructure-as-a-service (IaaS) and PaaS, ISVs utilize these platforms to create software-as-a-service (SaaS) offerings. This enables seamless integration and interoperability across various hardware manufacturers and Internet of Things (IoT) devices.
Independent software vendors (ISVs) expand their reach into industries such as healthcare, logistics, banking, financial services, and insurance (BFSI), and retail & e-commerce. They address distinctive business challenges by providing web-based services and standalone applications. The integration of artificial intelligence (AI) and machine learning (ML) into IoT applications enhances user experience (UX), while addressing privacy concerns. ISVs collaborate to deliver customized solutions. Furthermore, they offer technical support and training on various programming languages to empower the IT, telecommunications sectors, and educational institutions. With large technology and platform companies leading the charge in the adoption of digital solutions, ISVs remain at the forefront, embracing the latest technologies to shape the future of software products and mobile applications. ISVs' expertise in addressing industry-specific challenges and their ability to integrate advanced technologies make them indispensable partners in the digital transformation journey.
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Market Scope |
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Report Coverage |
Details |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 14.73% |
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Market Growth 2024-2028 |
USD 2,058.15 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
12.82 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 35% |
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Key countries |
US, China, Japan, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Adobe Inc., Alphabet Inc., Autodesk Inc., Avgi Solutions Inc., Cisco Systems Inc., Dell Technologies Inc., HP Inc., International Business Machines Corp., Intuit Inc., Magic Software Enterprises Ltd., Microsoft Corp., Mocana Corp., Nutanix Inc., Open Text Corp., Oracle Corp., Salesforce Inc., SAP SE, ServiceNow Inc., Virtusa Corp., and VMware Inc. |
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Market dynamics |
Parent market analysis, Independent software companies market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Independent software companies market worth and condition analysis for the forecast period. |
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Customization purview |
If our independent software vendors market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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