Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Software Engineering Market size was USD 151.6 billion in 2024 and is estimated to reach USD 352.2 billion by the end of 2037, expanding at a CAGR of 6.7% during the forecast period, i.e., 2025-2037. In 2025, the industry size of software engineering is assessed at USD 161.7 billion.
The software engineering market is propelling due to growing digitization and digital transformation efforts. International Data Corporation's (IDC) Worldwide Digital Transformation Spending Guide projects that global spending on DX will approach USD 4 trillion by 2027. Moreover, companies are highly investing in software engineering to improve customer experiences, increase operational efficiency, and adjust to the digital world.
As businesses seek to leverage technology to prosper in the digital age, this trend fuels demand for a broad spectrum of software solutions and services, from cloud computing to application development. Furthermore, there’s a growing need for software engineering services across a range of sectors, including banking, oil and gas, aerospace and defense, automotive, IT, and healthcare.
Software Engineering Market: Growth Drivers and Challenges
Growth Drivers
- Growing demand for mobile and web applications: As businesses undergo digital transformation, the need for user-friendly, responsive, and feature-rich applications has become primary. The growing use of smartphones and tablets has led to heightened demand for mobile applications, while the shift towards digital services has fueled the growth of web applications. The World Economic Forum stated in 2022, there were about 8.58 billion active mobile subscribers worldwide, out of a total population of 7.95 billion. Consequently, software engineers are witnessing high demand for their services to design, develop, and maintain scalable, secure, and efficient applications that cater to various industries including e-commerce, healthcare, finance, and education. The rise of emerging technologies such as 5G creates novel opportunities for software engineers to innovate and build advanced applications that transform the way businesses operate and people live.
- Cloud computing in software development: Cloud computing has transformed the development and deployment of software. It has simplified the process of developing and testing software apps for developers. Developers can use various tools and services, including development environments, testing platforms, and deployment tools, without investing in costly infrastructure. The practical application of cloud computing boosts the efficiency of software development and maintenance by 38%.
The increasing use of agile and DevOps techniques, which improve collaboration and expedite development cycles, has led to a boom in the software engineering sector. Additionally, as companies seek software specifically designed to match their needs, the growing demand for custom solutions spurs innovation. A move toward adaptable, customer-focused strategies is reflected in this trend, which encourages investment in software engineering services and solutions to meet changing market demands and propel corporate success. - Increasing integration of artificial intelligence (AI) and machine learning (ML): The software engineering sector is undergoing substantial change due to the convergence of growing security and privacy concerns with the development of AI and machine learning. According to a recent survey in 2024, 76% of all respondents are utilizing or intend to employ AI technologies in their development process, up from 70% the previous year.
Advanced security solutions that improve threat detection and privacy protection measures are being developed using AI and ML technology. In addition to addressing the growing need for reliable, secure, and privacy-preserving software solutions across various sectors and applications, this dual trend encourages innovation in software engineering.
Challenges
- Rapid technological advancements: Engineers need to keep up with the most recent advancements in software frameworks, tools, and programming languages. Given the depth of knowledge needed in fields like blockchain, augmented reality (AR)/virtual reality (VR), machine learning (ML), and artificial intelligence (AI), the pressure to stay up to date with emerging technologies might be unbearable.
- Data security & privacy issues: The increased danger of data breaches is one of the worst consequences of ignoring cyber security measures. Businesses that don't safeguard their systems and private information run the risk of being the target of cyberattacks, which might lead to the theft, exposure, or illegal access of important data. For the impacted entities, such breaches may lead to monetary losses, reputational damage, and legal ramifications. Therefore, this factor may impede the software engineering market.
Software Engineering Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
6.7% |
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Base Year Market Size (2024) |
USD 151.6 billion |
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Forecast Year Market Size (2037) |
USD 352.2 billion |
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Regional Scope |
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Software Engineering Segmentation
Deployment Model (On-premises, Cloud)
Cloud segment is projected to account for software engineering market share of more than 59.8% by the end of 2037. The segment growth can be attributed to the unmatched accessibility, affordability, and scalability. The demand is rising as businesses in several industries move their operations to cloud-based systems. The appeal of cloud computing is universal, transforming digital infrastructure and business processes for both startups and large corporations. Every facet of contemporary computing is impacted by it, highlighting its crucial role in forming the technical environment.
Services (Design, Development, Testing, Maintenance)
The testing segment in software engineering market will garner a notable share in the forecast period. This crucial segment guarantees the software product’s performance, dependability, and quality which is necessary for consumer satisfaction and company success. Thorough examination ensures error-free performance, improves user experience, and reduces expensive mistakes in everything from unit testing to user acceptability testing. The need for rigorous software testing services keeps growing as industries rely on software solutions, ensuring their market domination.
End use (BFSI, IT & Telecom, Healthcare, Manufacturing, Automotive, Retail & E-commerce, Government & Public Sector)
The automotive segment in software engineering market is estimated to gain a substantial share by 2037. The demand for computer-aided engineering software is anticipated to increase due to the growing necessity to assess the feasibility of heat dissipation techniques including ventilation, cooling, and aerodynamics in the area. Technology advancements have forced automakers to use automotive software solutions that may provide their customers with greater comfort and utility, and software engineers are a huge assist in this regard. Due to vehicle software development, technologies like shared mobility, networking, autonomous driving, and electric cars are now widely available. According to the International Energy Agency (IEA), in 2023, about 14 million new electric vehicles were registered worldwide, increasing the total number of these vehicles on the road to 40 million.
Our in-depth analysis of the global software engineering market includes the following segments:
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Services |
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Deployment Model |
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Organization Size |
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End use |
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Customize this ReportSoftware Engineering Industry - Regional Synopsis
North America Market Statistics
North America in software engineering market is likely to account for more than 45.2% revenue share by the end of 2037. The market is expanding in the region due to its strong infrastructure, cutting-edge technology, and vibrant startup ecosystem. The region’s hospitable economic climate and substantial R&D expenditures have stimulated expansion, drawn top personnel, and promoted an innovative culture. Furthermore, technology frequently gets more complicated as it advances raising the need for and value of software engineering specialists even more in the U.S. Employees with more sophisticated training such as the specific expertise of a software engineer are needed for increasingly complex technologies. For instance, an estimated 4.4 million professional software developers worked in North America in 2022. Software engineers comprise 2.54% of the US workforce, which consists of 152 million workers.
Canada is facing a labor shortage and an aging workforce accelerating the demand for immigrant software engineers. Therefore, to mitigate this issue the government has introduced various immigration policies attracting skilled software engineers from around the world. According to a recent report by the Government of Canada, STEM (science, technology, engineering, and mathematics) fields employ about 1.4 million immigrants in Canada. Although they make up 26% of the workforce in the country, immigrants make up 57% of all chemists, 43% of engineers, and 35% of computer programmers. Moreover, the software engineering market is driven by a thriving tech industry, innovation hubs, and favorable government initiatives in the nation.
Europe Market Analysis
Europe will account for a significant share of the software engineering market during the forecast period. The presence of major market participants will stimulate the market in the region. In a similar vein, Europe's largest industry is the automobile sector, which is expected to increase demand for computer-aided engineering. An increasing number of connected car providers and virtual vehicle developers are making significant investments in dependable engineering tools to streamline production costs. For instance, over 30% of the world's fleet of connected cars is located in Europe. One region with significant potential for connected services is the European Union.
The growing need for software solutions in industries including healthcare, banking, and education is fueling the UK software engineering market's expansion. The UK is well-positioned to lead software development in the years to come due to its highly qualified workforce and government assistance. Businesses worldwide now prioritize cybersecurity due to the rise in the quantity and frequency of cyber threats. Software engineers in the UK are skilled at robust security measures to safeguard private information and guarantee the integrity of web apps. Furthermore, growing online shopping has escalated the demand for immersive and user-friendly apps driving the software engineering market growth. The Center for Retail Research stated that online marketing in the UK increased dramatically from 10.6% in 2012 to 26.5% in 2022.
Germany is experiencing a demand for rapid digital transformation, particularly in 4.0, robotics, and IoT. For instance, Germany Trade & Invest (GTAI) reported that 62% of businesses in Germany use Industry 4.0-related gear, software, and IT services. Moreover, almost all businesses require software, the majority do not want or choose to employ an internal software development team. Software development is therefore one of the most outsourced IT services globally.
Companies Dominating the Software Engineering Market
- Accenture Plc
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Capgemini SE
- Cognizant Technology Solutions Corporation
- DXC Technology Company
- HCL Technologies Limited
- IBM Corporation
- Infosys Limited
- Tata Consultancy Services
- Wipro Limited
- Ansys, Inc.
The major players in the software engineering market are eager to create engineering solutions for a wide range of sectors, including electronics, semiconductors, manufacturing, retail, automotive, and construction. One of the most important strategies used by businesses is raising investments to upgrade solutions with new technologies. Similarly, software engineering market participants intentionally team up and cooperate globally for global growth.
In the News
- In October 2024, Accenture and NVIDIA announced an expanded cooperation, including the development of a new NVIDIA Business Group, to assist the world's organizations in rapidly scaling their AI usage.
- In March 2024, HCLTech, a leading global technology company, released HCLTech AI Force, an innovative GenAI platform that shortens time-to-value by transforming the software development and engineering lifecycle, resulting in increased productivity, higher quality, and faster release timelines.
Author Credits: Abhishek Verma
- Report ID: 6897
- Published Date: Dec 31, 2024
- Report Format: PDF, PPT
