Custom Software Development Market Developments by 2031
The custom software development market size is projected to reach US$ 181.81 billion by 2031 from US$ 35.16 billion in 2023. The market is expected to register a CAGR of 22.80% in 2023–2031. The integration of progressive web apps (PWAs) is likely to remain a key custom software development market trend.
Custom Software Development Market Analysis
The growing digital transformation across various industry verticals, such as BFSI, government, retail, healthcare, and others, is raising the demand for the development of custom software. The growing demand for digital banking is increasing as it helps customers conduct their financial operations with more ease, fuelling the growth of the market. Also, the growing need for business process automation is boosting the growth of the custom software development market. Furthermore, the integration of artificial intelligence, machine learning, and advanced analytics to gather data regarding customer behaviour and provide personalized solutions is further creating an opportunity for the growth of the custom software development market. Moreover, the rising demand for cloud computing is further fuelling the growth of the custom software development market.
Custom Software Development Market Overview
Custom software development is the process of designing software applications to meet the specific needs of an individual or a company. Various companies invest in custom software development specifically to address the exact needs of the customers. Furthermore, as the business grows with time, the need for various features in the software will also grow. Purchasing an off-the-shelf software solution can become a problem when it is not able to support the business or becomes too expensive to license, raising the demand for custom software, which can help to grow and scale the business processes. Furthermore, with custom software development, a user can integrate new software with the already existing software to refine business processes.
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Custom Software Development Market: Strategic Insights
Market Size Value in US$ 28.63 billion in 2022 Market Size Value by US$ 147.84 billion by 2030 Growth rate CAGR of 22.8% from 2022 to 2030 Forecast Period 2022-2030 Base Year 2022
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Custom Software Development Market: Strategic Insights
| Market Size Value in | US$ 28.63 billion in 2022 |
| Market Size Value by | US$ 147.84 billion by 2030 |
| Growth rate | CAGR of 22.8% from 2022 to 2030 |
| Forecast Period | 2022-2030 |
| Base Year | 2022 |
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Custom Software Development Market Drivers and Opportunities
Business Process Automation to Favor Market
Business process automation (BPA) is becoming increasingly important for businesses as they recognize the efficiency and productivity gains that can be achieved through automation. By automating routine tasks, organizations can enhance operational efficiency, minimize errors, standardize processes, and free up employees to focus on more strategic activities. BPA helps organizations reduce costs by streamlining processes and minimizing the need for manual intervention. Automated processes are less prone to errors, reducing the need for rework and correction, which further improves efficiency and reduces costs.
Increasing Adoption of AI – An Opportunity in the Custom Software Development Market
In this digital era, software plays a very important role in enabling companies to create automation tools, enhance customer experience, and reduce costs. This growing digitization is leading the growth of the software development sector, particularly due to the rapid advancement of technologies like Artificial Intelligence (AI), Machine Learning (ML), IoT, and others. This technological advancement is significantly impacting many industries, as the integration of the above technologies can help solve complex problems and the ability to generate information.
Custom Software Development Market Report Segmentation Analysis
Key segments that contributed to the derivation of the custom software development market analysis are type, deployment, and end use.
- Based on type, the market is divided into enterprise software development, web application development, and mobile application development. The web application development segment held a significant market share in 2023.
- Based on deployment, the market is bifurcated into on-premises and cloud. The on-premises segment held a larger market share in 2023.
- Based on end use, the market is bifurcated into BFSI, government, healthcare, it and telecom, and others. The BFSI segment held a significant market share in 2023.
Custom Software Development Market Share Analysis by Geography
The geographic scope of the Custom Software Development market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South America/South & Central America.
North America is expected to witness significant growth in the custom software development market in the forecasted period. In the region, the US will hold the largest custom software development market share in 2023 and will register the highest CAGR during 2023-2031. The demand for business process automation to improve efficiency and reduce costs is fuelling the growth of the custom software development market in the region. Also, the growing digital transformation in various industries is another factor fuelling the growth of the market. The region witnessed a digital transformation in its healthcare sector in recent years. The governments of various countries, as well as other organizations, are continuously working on the digitization of the healthcare sector.
Custom Software Development Market Report Scope
Custom Software Development Market News and Recent Developments
The custom software development market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for innovations, business expansion, and strategies:
- In August 2023, Butterfly Network, Inc., a digital health company, announced the release of its software development kit (SDK) for use by third parties. The SDK can be leveraged by artificial intelligence (AI) software developers, medical device companies building ultrasound into their platforms, and telemedicine companies adding ultrasound into their virtual care workflows. The kit will allow developers to utilize Butterfly’s platform to build custom applications that can be commercialized to Butterfly’s customer base – the largest user network in handheld point-of-care ultrasound. (Source: Butterfly Network, Inc., Press Release)
- In July 2023, Tietoevry announced that it had acquired MentorMate, a digital engineering company, from Taylor Corporation. MentorMate plays a key role in driving customers’ digital agenda with its strategy, design, and engineering capabilities. The acquisition accelerates Tietoevry’s strategy with a focus on software and digital engineering services. MentorMate will be part of the Tietoevry Create business, supporting its ambition to be a leading digital engineering player globally. (Source: Tietoevry, Press Release)
Custom Software Development Market Report Coverage and Deliverables
The “Custom Software Development Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering the following areas:
- Custom Software DevelopmentMarket size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Market dynamics such as drivers, restraints, and key opportunities
- Custom Software Development Market trends
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Custom Software Development market analysiscovering key market trends, Global and regional framework, major players, regulations, and recent market developments
- Custom Software DevelopmentIndustry, landscape, and competition analysis, covering market concentration, heat map analysis, prominent players, and recent developments
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type, End Use
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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