Software Development Market Size and Share
Software Development Market Analysis by Mordor Intelligence
The software development market stands at USD 0.57 trillion in 2025 and is forecast to reach USD 1.04 trillion by 2030 at a 12.9% CAGR. Strong enterprise appetite for artificial-intelligence-enabled tooling, rapid cloud-native adoption, and unrelenting digital-transformation mandates are accelerating spending across every major vertical. Generative AI already contributes 30% of enterprise code output, reshaping productivity expectations and widening the gap between early adopters and laggards ScienceDaily. Cloud deployment models dominate current spend and post the fastest growth at 24.0% CAGR, highlighting the shift away from on-premise infrastructure. Small and medium enterprises (SMEs) are pivotal to demand expansion as low-code platforms and pay-as-you-go cloud services lower entry barriers. Asia-Pacific’s 19.4% CAGR challenges North America’s 37.2% revenue lead, underscoring an increasingly multipolar growth narrative.
Key Report Takeaways
- By product type, Solutions led with 43.0% of software development market share in 2024; Services are projected to expand at 31.6% CAGR through 2030.
- By deployment type, cloud models captured 71.5% share of the software development market size in 2024 and will advance at a 24.0% CAGR to 2030.
- By organization size, SMEs accounted for 59.0% adoption in 2024, while large-enterprise projects trail at a 15.4% CAGR through 2030.
- By end user, healthcare digitization is set to grow at 18.7% CAGR, eclipsing IT & telecom’s 24.9% share of 2024 revenues.
- By region, North America held 37.2% of 2024 revenues; Asia-Pacific is on track for 19.4% CAGR to 2030.
Global Software Development Market Trends and Insights
Drivers Impact Analysis
Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Low-code / No-code adoption surge | +3.2% | Global – APAC in the lead | Medium term (2-4 years) |
Cloud-native and serverless development | +2.8% | North America & EU; APAC expanding | Long term (≥ 4 years) |
Enterprise digital-transformation budgets | +2.1% | Global – developed markets | Short term (≤ 2 years) |
Gen-AI code assistants scaling productivity | +1.9% | North America & EU first movers | Medium term (2-4 years) |
Sustainability-driven “green-coding” mandates | +1.4% | EU leadership, North America follows | Long term (≥ 4 years) |
Source: Mordor Intelligence
Low-code / No-code Adoption Surge
Enterprises embrace low-code platforms to mitigate developer shortages while sustaining rapid release cycles. Kissflow’s deployment across Puma Energy expanded from 200 to 1,500 users in under a year and cut workflow backlogs by double-digit percentages. Beyond cost savings, CIOs cite speed-to-market and business-user autonomy as critical benefits that shift low-code from prototyping to mission-critical status. APAC organizations, buoyed by an abundant citizen-developer base, are piloting low-code for enterprise resource planning extensions, accelerating uptake. Analysts project low-code’s ability to abstract infrastructure concerns will further democratize the software development market as skill shortages intensify. The mainstreaming of low-code is poised to add 3.2 percentage points to the headline CAGR as adoption moves from line-of-business pilots to enterprise-wide platforms.
Cloud-native and Serverless Development
Serverless functions and container orchestration redefine application economics by eliminating idle infrastructure costs and improving horizontal scalability. A 2025 study of SME workloads showed 38% average cost reduction versus virtual-machine-based deployments. North American digital-native firms champion serverless for product-led growth models, while European manufacturers leverage cloud-based MES for smarter factories. Growing data-center electricity demand—projected to reach 325–580 TWh in the United States by 2028—pressures architects to optimize workloads for energy efficiency. These sustainability imperatives reinforce the tilt toward lightweight, event-driven computing, embedding cloud-native design principles deep into the fabric of the software development market. As hyperscalers layer AI services atop serverless runtimes, barriers to entry for high-throughput applications fall even further.
Enterprise Digital-transformation Budgets
Global IT budgets reached USD 5.1 trillion in 2024, a 29% rise since 2020, and continue migrating toward AI platforms, cybersecurity tooling, and data-centric services. India’s software exports hit USD 200 billion in 2024, with 65.55% originating from the southern technology corridor, emphasizing buyer preference for mature delivery hubs. SMEs, however, report persistent skills gaps and financing constraints, suggesting that budget growth does not translate linearly to headcount OECD. Rapid telemedicine adoption and AI in diagnostics fuel healthcare’s out-sized investment, reinforcing its role as the fastest-growing vertical. In the near term, pent-up modernization projects postponed during pandemic-era austerity further swell spending, adding 2.1 percentage points to market expansion.
Gen-AI Code Assistants Scaling Productivity
Developer surveys show 97% have experimented with AI pair-programming tools, and GitHub Copilot’s user base exceeded 15 million in 2025. Microsoft earmarked USD 80 billion for its CoreAI group, underscoring board-level conviction that synthetic code will dominate future pipelines. Yet the technology introduces novel threats; “slopsquatting” exploits flawed package suggestions in large language models, elevating supply-chain risk. Regulatory and security teams now codify AI guardrails alongside conventional CI/CD policies, driving incremental demand for DevSecOps automation. Despite risk considerations, AI assistants consistently reduce boilerplate and unit-test authoring time, underpinning a 1.9 percentage-point boost to projected growth.
Restraints Impact Analysis
Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
---|---|---|---|
Escalating cyber-security threats | -2.3% | Global, with higher impact in regulated industries | Short term (≤ 2 years) |
Global shortage of senior developers | -1.8% | North America & EU most affected; APAC emerging | Medium term (2-4 years) |
Rising compute energy-costs for AI-powered builds | -1.4% | Global, concentrated in data-center hubs | Medium term (2-4 years) |
Licence-model shifts in open-source ecosystems | -0.9% | Global, higher impact on SMEs and start-ups | Long term (≥ 4 years) |
Source: Mordor Intelligence
Escalating Cyber-security Threats
A record 245,000 malicious packages infiltrated public repositories in 2024, inflicting USD 45.8 billion in damages and pushing cyber-insurance premiums higher. EU regulations now oblige vendors to embed security-by-design, with the Cyber Resilience Act and DORA enforcing stringent incident-reporting windows. Financial-services firms must conduct third-party risk assessments under DORA, extending compliance requirements to every component in the build pipeline. Development teams, therefore, allocate more hours to threat modeling and dependency validation, stretching release schedules. Heightened scrutiny depresses forecast growth by 2.3 percentage points, especially where breach-related liabilities loom large.
Global Shortage of Senior Developers
Job postings fell 28% from pre-pandemic peaks, yet 90% of engineers report tougher hiring conditions, revealing a mismatch between traditional full-stack skills and soaring demand for AI, cybersecurity, and cloud-architecture expertise. Western markets feel the pinch most acutely as data-center roll-outs and AI projects outpace local talent pools. India’s expected surge to the world’s largest developer base by 2027 offers partial relief, with IT export targets of USD 210 billion and aggressive graduate hiring plans. Nevertheless, salary inflation persists, compelling firms to outsource or adopt low-code tooling. Shortfalls in senior mentorship slow complex project delivery, subtracting 1.8 percentage points from market expansion
Segment Analysis
By Product Type: Services Outpace Solutions Growth
Services revenue is accelerating at a 31.6% CAGR (2025-2030), reflecting a pivot toward end-to-end development partnerships that bundle strategy, implementation, and managed operations. The segment’s expansion aligns with Microsoft and Accenture’s generative-AI alliances that fuse cloud platforms with consulting expertise, highlighting client demand for turnkey engagements. Solutions maintained 43.0% of the software development market share in 2024, yet face competitive headwinds as buyers favor subscription bundles over perpetual licenses. Mobile-centric frameworks such as React Native and Flutter are converging with progressive-web-app tooling, enabling single-code-base outputs that behave like native experiences across devices.
The solutions portfolio continues to evolve toward AI-native features, including automated UI generation and embedded test-case creation. Vendors are enhancing interoperability by exposing REST and GraphQL endpoints, facilitating composable architectures that mesh with existing ERP and CRM layers. As enterprises mature, demand for platform engineering, infrastructure-as-code accelerators, and post-deployment optimization services lifts overall spend, reinforcing the growth trajectory for Services inside the software development market
By Deployment Type: Cloud Dominance Accelerates
Cloud deployments delivered 71.5% of 2024 revenue and are projected to grow 24.0% CAGR to 2030, underscoring the structural migration away from on-premise stacks. AWS’s USD 7.8 billion Ohio investment and its joint custom-chip roadmap with Intel exemplify hyperscalers’ commitment to AI-ready capacity.[1]Amazon Web Services, “AWS and NVIDIA Extend Collaboration to Advance Generative AI Innovation,” press.aboutamazon.com On-premise estates remain essential for data-sovereign workloads and latency-critical processes, yet hybrid frameworks now extend zero-touch automation to private clusters, narrowing functional gaps. Edge computing introduces a complementary paradigm, pushing event processing closer to sensors for IoT and real-time analytics use cases.
Cloud providers embed AI model-as-a-service options, making pre-trained language models accessible via API calls, which encourages development teams to offload MLOps complexity. Multi-cloud strategies help mitigate vendor lock-in and optimize cost structures, evidenced by enterprises like Coca-Cola running Azure OpenAI side-by-side with AWS analytics services. These synergies underpin the sustained expansion of the software development market.
By Organization Size: SMEs Lead Adoption
SMEs captured 59.0% of 2024 revenue and are expanding at 15.4% CAGR through 2030, benefiting from subscription-based pricing, pay-as-you-go cloud runtimes, and intuitive AI assistants that reduce learning curves. Citizen-developer programs flourish as departmental analysts build workflow apps, dashboards, and lightweight integrations without waiting for central IT backlogs. Bundled security and governance features allow SMEs to comply with data-protection rules using templated policies and automated audits, lowering barriers to entry in the software development market.
Large enterprises still dominate mission-critical workloads requiring complex integrations, custom encryption modules, and high-throughput data pipelines. However, they increasingly prototype on low-code environments before handing projects to professional development teams for hardening and scale-out. Converging needs across enterprise tiers stimulate demand for platforms offering tiered capabilities that add advanced modules—AI explainability, federated learning, or on-premise gateways—when organizations mature.

By End-user: Healthcare Emerges as Growth Leader
IT & Telecommunication maintained 24.9% of revenue in 2024, driven by network-modernization cycles and consumer-app refreshes. Healthcare, advancing at an 18.7% CAGR, exemplifies rising demand for regulatory-compliant low-code tooling and AI-driven diagnostics. SDA SE deployed a patient-engagement app on AWS to meet strict data-sovereignty mandates while shortening release cycles from months to weeks.[2]CISA, “We Must Consider Software Developers a Key Part of the Cybersecurity Workforce,” cisa.gov Florida Blue’s claims-processing overhaul achieved a 40% performance uplift after refactoring for cloud-native microservices.[3]Intellisoft Technologies, “Florida Blue – Modernizing Transaction Processing System,” online.intellisoft-tech.com
BFSI institutions reinvest heavily in DevSecOps, with IDFC FIRST Bank quantifying USD 5 million in annual savings after fully automating its CI/CD and security gate. Manufacturing pursues predictive-maintenance apps powered by IoT telemetry; Intel and Fujitsu reported lead-time reductions of up to 20% in pilot lines using edge analytics. These sectoral dynamics expand the total addressable base for the software development market.
Geography Analysis
North America held 37.2% revenue in 2024 due to a dense concentration of software vendors, hyperscale data centers, and healthy enterprise IT budgets. Federal modernization, including the U.S. Air Force’s 82.7% cost reduction after cloud migration, exemplifies the region’s willingness to re-platform legacy assets. Microsoft’s large multi-cloud agreements and Intel–AWS custom-chip initiatives reinforce North America’s central role in defining architectural standards for the software development market.
Asia-Pacific is projected to expand at 19.4% CAGR between 2025-2030, underpinned by India’s developer community reaching 15.4 million on GitHub and Japan’s 28.48% annual growth targeting its “2025 cliff” modernization milestone. Hitachi’s multi-billion-dollar partnership with Microsoft to train 50,000 AI professionals shows domestic champions scaling generative-AI adoption at speed.[4]Hitachi Ltd., “Hitachi to Accelerate System Development Transformation with Generative AI,” hitachi.com China’s double-digit software-sector revenue growth further bolsters regional momentum, supported by state incentives for cloud and AI infrastructure.
Europe remains steady as sustainability regulations and GDPR compliance drive adoption of green-coding frameworks and sovereign-cloud options. Enterprises embed carbon-budget dashboards into CI workflows, aligning with EU taxonomy rules. South America, the Middle East, and Africa show rising demand as connectivity improves and governments digitize citizen services, opening new footholds for vendors targeting the software development market.

Competitive Landscape
The software development market displays moderate consolidation. The top tier—Microsoft, AWS, Google, Oracle, and IBM—pursues vertical integration, embedding AI copilots, managed databases, and DevSecOps toolchains into cohesive stacks. Microsoft broadened its ecosystem through multi-billion-dollar collaborations with Accenture, Hitachi, and Kyndryl, aligning consulting capacity with Azure OpenAI consumption. AWS strengthened hardware differentiation by co-designing CPUs and AI accelerators with Intel, lowering cost-per-inference for serverless applications.
Mid-tier players such as Red Hat, GitLab, Atlassian, and ServiceNow compete via open-source leadership, workflow orchestration, and niche compliance modules. IBM’s watsonx Code Assistant and Oracle’s AI-accelerated OCI clusters exemplify the pivot toward specialized AI services. Start-ups focusing on domain-specific code generation raise capital to carve out vertical niches—healthcare, embedded systems, or financial risk modeling—challenging incumbent breadth with depth.
Partnerships rather than outright acquisitions dominate strategy as providers seek to avoid culture clashes and retain developer mindshare. Press releases from Adobe, Salesforce, and EPAM show alliances that embed AI into pre-existing SaaS and consulting offerings, expanding cross-sell potential without diluting brand identity. Pricing innovation—usage-based AI tokens, tiered seat licenses, and outcome-linked SLAs—emerges as a differentiator in the software development market.
Software Development Industry Leaders
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Apple Inc
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Google LLC
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Microsoft Corporation
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IBM
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NVIDIA Corporation
- *Disclaimer: Major Players sorted in no particular order

Recent Industry Developments
- March 2025: Adobe announced new collaborative offerings with AWS and Amazon Ads, integrating Adobe Experience Platform with AWS services to personalize customer interactions at scale.
- February 2025: Salesforce and Google Cloud deepened their alliance, integrating Gemini language models into Salesforce Agentforce for AI-powered service workflows.
- January 2025: EPAM Systems agreed to acquire NEORIS, expanding near-shore delivery capacity across Latin America for digital-transformation projects.
- December 2024: AWS and poolside signed a multi-year deal to embed poolside’s generative-AI models in Amazon Bedrock and EC2, enabling secure, customizable code assistants for enterprise developers
Global Software Development Market Report Scope
Software development is the method utilized for producing software. Writing and managing the source code is crucial in this process. It involves planning the project, assessing its viability, understanding business needs, creating software designs, testing, and finally launching the project.
The software development market is segmented by product type (solution (mobile based, web based), service), deployment type (on-premise, cloud), organization size (SMEs, large enterprise), end-user (BFSI, media and entertainment, government and defense, it and telecommunication, healthcare, manufacturing, others), geography (North America, Europe, Asia Pacific, Latin America, Middle East and Africa). The Report Offers Market Forecasts and Size in Value (USD) for all the Above Segments.
By Product Type | Solutions | Mobile-based | |
Web-based | |||
Services | |||
By Deployment Type | On-premise | ||
Cloud | |||
By Organization Size | Small and Medium Enterprises (SMEs) | ||
Large Enterprises | |||
By End-user | BFSI | ||
Media and Entertainment | |||
Government and Defense | |||
IT and Telecommunication | |||
Healthcare | |||
Manufacturing | |||
Others | |||
By Region | North America | United States | |
Canada | |||
Mexico | |||
South America | Brazil | ||
Argentina | |||
Rest of South America | |||
Europe | Germany | ||
United Kingdom | |||
France | |||
Spain | |||
Italy | |||
Rest of Europe | |||
Asia-Pacific | China | ||
India | |||
Japan | |||
South Korea | |||
Australia and New Zealand | |||
Rest of Asia-Pacific | |||
Middle East | Saudi Arabia | ||
UAE | |||
Turkey | |||
Rest of Middle East | |||
Africa | South Africa | ||
Egypt | |||
Nigeria | |||
Rest of Africa |
Solutions | Mobile-based |
Web-based | |
Services |
On-premise |
Cloud |
Small and Medium Enterprises (SMEs) |
Large Enterprises |
BFSI |
Media and Entertainment |
Government and Defense |
IT and Telecommunication |
Healthcare |
Manufacturing |
Others |
North America | United States |
Canada | |
Mexico | |
South America | Brazil |
Argentina | |
Rest of South America | |
Europe | Germany |
United Kingdom | |
France | |
Spain | |
Italy | |
Rest of Europe | |
Asia-Pacific | China |
India | |
Japan | |
South Korea | |
Australia and New Zealand | |
Rest of Asia-Pacific | |
Middle East | Saudi Arabia |
UAE | |
Turkey | |
Rest of Middle East | |
Africa | South Africa |
Egypt | |
Nigeria | |
Rest of Africa |
Key Questions Answered in the Report
What is the current value of the software development market?
The software development market is valued at USD 0.57 trillion in 2025 and is projected to reach USD 1.04 trillion by 2030.
Which region is growing fastest in the software development market?
Asia-Pacific leads with a forecast 19.4% CAGR (2025-2030) driven by rapid developer-community expansion and aggressive cloud-infrastructure investments.
Who are the key players in Software Development Market?
Apple Inc, Google LLC, Microsoft Corporation, IBM and NVIDIA Corporation are the major companies operating in the Software Development Market.
Why are services growing faster than solutions in this market?
Enterprises increasingly demand end-to-end partnerships that combine strategy, AI integration, and managed operations, resulting in a 31.6% CAGR for the Services segment.
How are generative-AI code assistants impacting developer productivity?
Tools like GitHub Copilot and IBM’s watsonx Code Assistant cut task times by up to 88% and achieve acceptance rates exceeding 80%, accelerating release cycles.
What deployment model dominates the software development market?
Cloud deployment holds 71.5% of 2024 revenue and continues to rise due to scalable infrastructure, integrated AI services, and lower total-cost-of-ownership.
How are SMEs benefiting from modern application development platforms?
Subscription pricing, low-code interfaces, and embedded AI allow SMEs to build enterprise-grade applications without large development teams, explaining their 59.0% revenue share in 2024.