How Big Is the Software Industry? A Deep Dive

How Big Is the Software Industry? A Deep Dive

As we delve into the realm of technology, the software industry emerges as a rapidly expanding subsector, ripe with innovation.

In the United States alone, the software industry is expected to surge to a staggering $338.20 billion in annual revenue. Globally, the pulse quickens further, with the market size valued at a mammoth $583.47 billion. If you're wondering "how big is the software industry," these are just the top line numbers. 

Here at Blaze, we're not just participants in this phenomenal market; we're passionate movers and shakers of its story. Through this article, we aim to offer more than just numbers; we aim to provide a lens through which the sheer scale and potential of the software industry become crystal clear. 

So, whether you're a startup, a tech enthusiast, or a business strategist, this deep dive is your gateway to understanding the colossal ecosystem that is the software industry.

How Much Is the Software Industry Currently Worth?

To gauge the software industry's worth is to understand the engine powering not just Silicon Valley's bright minds but also the corporate titans that span the globe.

With a valuation that soared to $583.47 billion in 2022, the software sector's magnitude becomes clear—it dwarfs the global entertainment industry, which has only just crested the $100 billion mark.

Enterprise software, the linchpin of large-scale business operations, commands a market volume of $271.80 billion as of 2023, signaling its pivotal role in the corporate sphere.

Yet, legacy software products endure, maintaining their market significance amid a shift toward recurring revenue models.

And the horizon? The industry's growth trajectory, propelled by a robust compound annual growth rate, promises an expanding domain, signaling an industry evolving as dynamically as the technology it produces.

This discourse transcends mere financials; it's about appreciating how each segment—from enduring software staples to the burgeoning realms of SaaS and cloud computing—collectively advances a future ever more entwined with the digital thread.

enterprise software
The software industry is in the middle of a renaissance. Enterprise software is leading the way, commanding an impressive $271.8 billion in market volume.

Market Segments: Understanding The Diverse Components of Software's Value

The software industry's value is not merely a number—it's a tapestry of diverse market segments, each pivotal in its own right. Let's explore these sectors:

  • Application Software: This segment, capturing over 43% of the market share, includes critical systems like ERP and CRM, driving efficiency through IoT and cloud-based solutions​​.
  • Development and Deployment Software: With EDM leading, this sector is surging, thanks to automation and increased data volume. Cloud-based ERP solutions are gaining momentum, particularly among small and medium-sized businesses​​.
  • On-Premises Software: Still preferred by many for its security benefits, on-premises solutions commanded 58% of revenue in 2022​​.
  • Cloud-Based Software: The shift to the cloud is unmistakable, promising significant growth due to its affordability and adaptability​​.
  • Retail Segment: The software demand in retail is climbing, fueled by the need for sophisticated analytics and inventory management systems​​.
  • SMEs: Despite budget constraints, SMEs are gravitating towards scalable, cloud-based software, signaling a broader trend of digital transformation​​.

Each segment's growth reflects the dynamic demand for software—from the ubiquity of cloud solutions to the specialized needs of the retail sector—showcasing the software industry's expansive role in shaping a digitally interconnected future.

Market Growth: Forecasting the Software Industry's Expansion

The software industry is rapidly growing with no signs of slowing down.

In 2023, the overall IT market, which encompasses our sector, swelled to $8.852 trillion. We're witnessing an 8.2% compound annual growth rate (CAGR), with projections hurtling towards an impressive $11.997 trillion by 2027​​.

Yet, it's artificial intelligence that's igniting the rocket fuel for growth. 

Consider this: the AI market alone is expected to balloon from its current $428 billion to an anticipated $2,025.12 billion by 2030, all at a brisk 21.6% CAGR. It's a thrilling pace, set by AI's proliferation across businesses and the emergence of nimble AI firms reshaping the corporate landscape​​​​.

As AI accelerates development in general, sectors such as marketing & sales, product/service deployment, and service operations are booming. 

Supply chain management? Transformed. Companies are enlisting AI to cut through complexity like a laser, achieving sleeker operations​​. 

Retail inventory management? Revolutionized. The push for AI in retail is enhancing everything from cashless transactions to inventory tracking. Retailers now have no-code AI platforms to manage operations and analyze consumer behavior

And cloud computing—oh, it's soaring. From a hefty $483.98 billion valuation in 2022, we're charting a course to scale even higher, propelled by a 14.1% CAGR through to 2030​​.

In the market's expected growth trajectory, AI and cloud computing are not just trends; they're the twin engines powering a new era of digital sophistication and operational agility.

supply chain management how big software industry
From supply chain management to retail inventory management, software has become an integral part of any operation. The reality has never been clearer: software is just as integral as hardware.

Dominance and Diversity: Analyzing Software Industry Leaders

The software industry stands out for its scale as well as the diversity and dominance of its key players. It’s an industry where a few behemoths hold considerable sway.

The aggregate market cap of the titans of software is an eye-watering $92.304 trillion. It's a figure that speaks volumes, not merely about the wealth concentrated within the leaders of software, but about the pivotal role they play in driving technology forward​​. Apple, Microsoft, and Google are the only three (out of 403 companies) to cross $1 trillion in market cap.

Drilling down, CRM software emerged as a significant pillar within the enterprise software market, boasting the largest share at 27.20% in 2022. Real estate—a sector traditionally not synonymous with cutting-edge tech—is now riding the digital wave. Commercial real estate CRM systems are increasingly embraced to boost productivity and drive sales. 

In the realm of ERP software, a predicted CAGR of 10.7% suggests a healthy appetite for systems that streamline business operations. The drive for efficiency isn't just about cutting costs; it's about fostering a seamless flow of information that amplifies business intelligence and decision-making​​.

Yet, not all legacy systems are yielding ground. Despite the cloud's ascent, on-premises software maintained a strong 54% market share. On-premises software remains popular for its robust security and reliable performance without the tether of internet dependency​​.

Despite this, cloud computing's rise is undeniable. Cloud-based services are projected to surge at a 13.6% CAGR. The allure here is multifaceted: cost savings, collaborative efficiency, and the promise of infinite scalability, enticing corporate behemoths to pivot to cloud solutions. This pivot isn't just a technological upgrade; it's a strategic recalibration towards a more agile and interconnected corporate ecosystem​​.

Large enterprises, occupying a 65.0% market share, are not just users of enterprise software; they're driving its evolution, increasingly favoring platforms imbued with AI and ML capabilities. Their investment reflects a broader strategy to leverage automation for operational excellence and competitive advantage​​.

These trends and figures are more than a snapshot; they are a forecast of an industry in flux, where cloud-based software and management software are becoming central to the narrative of modern business. The software industry, with its colossal size and influence, is not merely growing—it is evolving, integrating, and redefining the future of commerce and technology.

Innovation's Impact: The Rise and Growth of No-Code AI Platforms

A not-so-quiet revolution is underway with the rise of no-code AI platforms.

From ChatGPT to tech apps, these platforms are simplifying the future of software development. 

As of 2022, AI-powered software claimed only $3.06 billion market share. Yet it’s expected to skyrocket to $20.42 billion by 2030, an impressive 27.3% CAGR.

Through no-code platforms like Blaze, organizations are building their own internal tools. Absolutely zero coding knowledge is required. Some of the most common applications include:

  • Employee Onboarding Software. Onboarding is one of the most critical priorities for HR. However, because of inefficiencies and other priorities, it’s also one of the most overlooked. Now, HR teams have the ability to craft their own onboarding solutions without writing a single line of code. The process is streamlined and organized, ensuring that nothing and no one falls through the cracks.
  • Contract Management. From real estate to major ad companies, contracts are what keep business going. Contract workflow keeps everything in line. This prevents various versions and revisions from getting mixed up. Get contracts signed faster and automate the routine parts of your contract workflow. 
  • Retail Inventory Management System. Poor inventory management leads to poor customer experiences. Retailers can prevent this by centralizing all of their data into a single place. This allows them to analyze the data thoroughly, making informed decisions about when to place the next product order. This keeps your inventory in stock, even for the most popular items. 
  • Admin Panels. Thanks to integration with SQL, MongoDB, and PostgreSQL, admin consoles have never been easier to create. No-code options allow you to build admin panels by simply dragging and dropping elements into place. Now, it’s possible to search customer data, search for orders, and update contact information from a single dashboard. 

The growing no-code AI trend is reshaping software as a service (SaaS). It’s broadening the software market size. It's not just about easier software creation; it's about democratizing technology, making the power of AI accessible to all.

drag and drop app software builder
No-code solutions are revolutionizing the software industry. Now, organizations and businesses of every size can create their own apps and internal tools without writing a single line of code. It really is as easy as dragging-and-dropping elements into place!

The Future Is Bright and Accessible

The software industry is rapidly changing and growing. 

Fortunately, with no-code platforms, no one has to be left behind.

Start-ups and thriving small-to-medium sized companies can now compete with global enterprises when it comes to software solutions. No-code platforms like Blaze empower you to build your own internal tools without writing a single line of code.

It truly is as simple as drag-and-drop.

The best part?

In addition to supercharging your productivity, you can rely on HIPAA compliance and enterprise-grade security. 

No matter how big the software industry is, every player can be part of it. That’s what it means to democratize technology – and that’s exactly what no-code is doing. 

Interested in learning more? Schedule a free demo with Blaze today!