Business Software And Services Market Size, Share & Trends Analysis Report By Software, By Service, By Deployment, By End-use, By Enterprise Size, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global business software and services market size was valued at USD 389.86 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 11.3% from 2021 to 2028. The rapid increase in the volume of enterprise data and growing automation of business processes across several end-use industries such as retail, manufacturing, healthcare, and transportation are expected to drive the demand for business software and services over the forecast period. Significant rise in deployment of enterprise software and services across IT infrastructure for enabling better strategic decision-making, reducing inventory cost, enhancing profitability, and enabling organizations to improve their market position is estimated to drive the market growth over the forecast period.

Various organizations across the globe are increasing the scale of their operations to cater to a larger market and this is driving the need for business software and services within organizations. The growing use of cloud-based platforms has triggered the demand for cloud-based software solutions and services among small- and medium-sized enterprises, owing to advantages such as flexibility, cost-effectiveness, and mobility. Cloud-based services include data backup, data security, and system upgrade, among others. Furthermore, the rising adoption of advanced technologies such as blockchain, hybrid architecture, artificial intelligence, and machine learning is expected to contribute to the growth of the market over the forecast period.

Enterprise software and services are significantly used in end-use industries such as BFSI, government, healthcare, manufacturing, and retail as they enable streamlining of business processes. The software and services enable easy and quick access to unstructured data gathered through data analytics to achieve data privacy and security objectives. Moreover, the deployment of enterprise solutions results in a significant reduction in raw material and inventory costs, which helps organizations achieve increased profitability. Numerous organizations are adopting these solutions to increase operational efficiency by integrating administrative systems into a single program. Business solution modules link departmental data with real-time updates, which offers better data transparency in operations. Enterprises opt for ideal software and solutions depending on their needs.

The outbreak of the COVID-19 pandemic is expected to have a positive impact on the business software and services market. According to an NTT Ltd. report commissioned by International Data Group, Inc. (IDG), the normalization of the work-from-home model amid the local and global quarantine situation has increased the demand for value-added services for reducing security risks. Organizations across the globe have resorted to business software and service providers for the provision of a wide range of services and solutions, and this trend is likely to remain strong in the near future as well. Owing to the COVID-19-induced economic uncertainty, numerous business software and service vendors are expected to focus more on customer-service-driven strategies such as proactive assistance in customers’ digital journey.

Higher costs of licensing and the need for timely support are the major constraints for the market growth. The price of licensing a solution excludes software development costs. The maintenance and support cost of a solution is covered in the standard software cost, and additional integration and customization often lead to an increase in maintenance and support costs. Enterprises also incur additional expenditure related to timely maintenance and periodic updates.

Software Insights

Based on software, the market has been further segmented into finance, sales & marketing, human resource, supply chain, and others. The finance segment accounted for the highest market share of over 20% in 2020. The increasing importance of financial management tools across businesses and enterprises for planning, budgeting, analysis, and reporting is expected to drive the growth of the finance segment. Financial management software is extensively adopted in the BFSI industry in North America owing to the need for risk compliance and improvements in efficiency & productivity of operations.

The human resource segment is expected to register considerable growth over the forecast period as this software is widely deployed across a wide number of end-use industries. The solution helps integrate and computerize human resource processes such as training, payroll, and recruitment. Furthermore, several payroll associations such as ADP Canada, ASL Consulting, Apex Time Solutions, and CADJPRO Payroll Solutions are adopting human resource management solutions owing to their benefits at an organizational scale.

Service Insights

Based on service, the market has been further segmented into consulting, managed services, and support and maintenance. The support and maintenance services segment accounted for the highest market share exceeding 40% in 2020. This dominance can be attributed to the rising popularity of business management solutions and the emergence of software models to detect & fix issues pertaining to the quality of a product. The growing demand for third-party support & maintenance services, owing to cost-effectiveness, and for well-trained and experienced technicians is expected to propel the growth of the segment over the forecast period.

The managed services segment is anticipated to emerge as the fastest-growing segment over the forecast period. The increasing dependence of enterprises on IT assets and infrastructure to improve their productivity is anticipated to drive the growth of the managed services segment. The consulting services segment is anticipated to witness considerable growth over the forecast period. The growth of the segment can be attributed to the increase in demand for various consulting services in end-use industries for managing risks and identifying growth opportunities for future development.

Deployment Insights

Based on deployment, the market has been further segmented into cloud and on-premise. Cloud and on-premise technologies are preferably deployed based on organizational needs and requirements. The on-premise segment accounted for the highest market share of over 60% in 2020. The growing demand and rising preference of organizations for different enterprise software and services that enable customization of software according to the client’s requirements are expected to drive the demand for on-premise deployment over the forecast period.

Cloud services are being widely used in the global market as they minimize the need for a manual upgrade in enterprises and enable users to access data from remote locations in a hassle-free manner. Cloud-based services allow organizations to utilize and pay for only the amount of resources they need, which helps organizations minimize energy consumption and increase cost-effectiveness. Furthermore, stringent government regulations for minimizing carbon footprint are encouraging organizations to opt for cloud-based services, which is expected to drive the cloud segment growth.

Enterprise Size Insights

Based on enterprise size, the market has been segmented into large enterprises and small & medium enterprises. The large enterprise segment accounted for the highest market share exceeding 55% in 2020. Large and Small & Medium Enterprises (SMEs) deploy business software and services to strengthen the internal and external operational processes. Factors such as the use of advanced analytical engines, real-time data compilation tools, and process blueprints are driving the adoption of enterprise solutions and services in large enterprises.

The increasing preference among enterprises for efficient networking solutions and automation capabilities is expected to drive the demand for enterprise software and services in the large enterprise segment. The growing emphasis on strategic decision-making and resource allocation is expected to further drive the growth of the large enterprise segment. The increasing number of government initiatives, including digital campaigns such as social media marketing, video marketing, and search engine marketing, is anticipated to trigger the growth of the SMEs segment. For instance, in May 2019, Info-Communications Media Development Authority (IMDA), Singapore, launched a public consultation process to design a policy framework for facilitating 5G.

End-use Insights

Based on end-use, the market has been segmented into aerospace and defense, BFSI, government, healthcare, IT and telecom, manufacturing, retail, transportation, and others. The BFSI segment accounted for the highest market share exceeding 15% in 2020. This dominance can be attributed to increased deployment of enterprise software to enable enhanced client experience, and advantages such as secure transactions and constant access to client databases. Furthermore, the rising digitization of banking institutions to deliver enhanced customer experience is anticipated to drive the demand for business software and services in the BFSI segment.

The IT and telecom segment is expected to witness remarkable growth over the forecast period. The growing importance of re-evaluating strategies and deploying advanced technologies in business processes is expected to drive the growth of the IT and telecom segment. Various organizations are expanding their operations to cater to larger markets; this is driving the demand for business solutions and services in organizations to efficiently offer solutions to their customers.

Regional Insights

North America dominated the global market with a share of over 20% in 2020. This growth can be attributed to the growing demand for high-speed data networks and the significant presence of software vendors in the region. Companies in North America are focusing on developing custom analytics and intelligence solutions, in addition to the implementation of software and analytics-based strategies, as compared to other regions. Canada is home to a large, educated workforce of computer scientists, data analysts, and software engineers, who deal with enterprise solutions and services. This is expected to further drive the growth of the North American regional market.

Europe emerged as the second-most dominant regional market in 2020. Significant investments by large corporations and the deployment of new technologies across businesses and enterprises are driving the regional market growth. Emphasis on cloud-based facilities and initiatives toward developing enterprise intelligence solutions are expected to boost the demand for enterprise solutions in the European region. For instance, the European Cloud Initiative launched by the European Union envisages providing a digital lead in the data-driven market to organizations willing to gain the benefits of cloud services.

Key Companies & Market Share Insights

The need for compliance with stringent government regulations among various industries in developing countries has triggered the implementation of business solutions. They enable enterprises to enhance productivity and minimize the complexities of business operations. The need for strengthening business policies, standards, and data portability is driving the market growth.

The growing need for mobility and data portability is leading to a higher emphasis on the use of data-centric solutions, subsequently driving the demand for business software and services. Market players are pursuing various growth strategies, including partnerships, strategic agreements and collaborations, mergers and acquisitions, and new product development, to stay competitive in the market. For instance, in June 2020, International Business Machines Corporation and SAP SE announced a partnership to develop and deliver advanced intelligent industry solutions that can potentially enable end-to-end processes and help businesses in accelerating the modernization of workflows and systems. Some prominent players operating in the global business software and services market are:

• Acumatica, Inc.

• Deltek, Inc.

• Epicor Software Corporation

• International Business Machines Corporation

• Infor Inc.

• NetSuite Inc.

• Microsoft Corporation

• SAP SE

• Oracle Corporation

• Totvs SA

• Unit4

• SYSPRO

Business Software And Services Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global business software and services market report based on software, service, deployment, enterprise size, end-use, and region:

• Software Outlook (Revenue, USD Billion, 2016 - 2028)

  • Finance

  • Sales & Marketing

  • Human Resource

  • Supply Chain

  • Others

• Service Outlook (Revenue, USD Billion, 2016 - 2028)

  • Consulting

  • Managed Services

  • Support & Maintenance

• Deployment Outlook (Revenue, USD Billion, 2016 - 2028)

  • Cloud

  • On-premise

• Enterprise Size Outlook (Revenue, USD Billion, 2016 - 2028)

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Billion, 2016 - 2028)

  • Aerospace & Defense

  • BFSI

  • Government

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Retail

  • Transportation

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • MEA