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Software Development in Europe - Market Size, Industry Analysis, Trends and Forecasts (2024-2029)

ISIC 6201 October 2024 Spotlight Report

Revenue

€374.1bn

2019-2024 2.8 %
2024-2029 X.X %

Employees

2m

2019-2024 3.2 %
2024-2029 X.X %

Businesses

472k

2019-2024 2.7 %
2024-2029 X.X %

Wages

€XX.Xbn

2019-2024 X.X %
2024-2029 X.X %

Software Development in Europe industry analysis

European software developers' revenue is forecast to drop at a compound annual rate of 2.8% over the five years through 2024 to €374.1 billion due to challenging economic conditions. Software development revenue has been supported by rising digitisation and technological developments throughout the continent. The industry has been characterised by acquisitions, as global developers have sought to remain on top of market trends and protect their competitive positions by acquiring smaller businesses, particularly niche developers.

European coverage with a localised twist

  • Market estimates from 2014-2029
  • Detailed reports analysing industry performance, market dynamics and company data, compared across countries
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Industry Statistics and Trends

Software Development in Europe key trends

Demand for cloud-based software surges.

 

A surge in working from home has boosted demand for cloud-based software, as this technology helps businesses manage operations remotely.

Software-as-a-Service (SaaS) applications boost revenue.

 

Rather than purchasing software upfront and installing it on a computer, SaaS users subscribe to the software. The SaaS model requires no additional setup and can be accessed anywhere, making it attractive.

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Software Development in Europe

Industry Revenue

Total value and annual change from 2011-2029. Includes 5-year outlook.

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Software Development in Europe market size (2019-2024)

Industry revenue has declined at a CAGR of 2.8 % over the past five years, to reach an estimated €374.1bn in 2024.

Trends and Insights

Developers benefit from innovation in computing procedures, including Fintech

  • European fintech companies have developed new and innovative products and services, requiring input from software developers. KPMG’s 2022 Fintech report suggests that European Fintech companies raised €63 billion in 2022, up from €32 billion in 2021.

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Software Development in Europe outlook (2024-2029)

Market size is projected to grow over the next five years.

The burgeoning Internet of Things promises to test developers

  • The necessity of dealing with large data stores in companies in the European media, pharmaceutical, retail and finance sectors is likely to stimulate software sales.

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Revenue

€374.1bn

2019-2024 2.8 %
2024-2029 X.X %

Employees

2m

2019-2024 3.2 %
2024-2029 X.X %

Wages

€XX.Xbn

2019-2024 X.X %
2024-2029 X.X %

European Leaders & Laggards

Europe Job Growth CAGR: 3.2 % *
  • Job Growth

Top 5 Countries

  1. Portugal +9.6%
  2. Estonia +9.4%
  3. Croatia +9.0%
  4. Norway +8.6%
  5. Slovakia +8.2%

Bottom 5 Countries

  1. Bosnia & Herzegovina -5.1%
  2. Greece -5.1%
  3. Romania -5.1%
  4. Poland -5.1%
  5. Lithuania -5.1%

* CAGR values are for the years 2019-2024.

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Biggest companies in the Software Development in Europe

Company
Market Share (%)
2024
Revenue (€m)
2024
Profit (€m)
2024
Profit Margin (%)
2024
SAP SE
34,000.0
8,900.0
26.2
Alphabet Inc
340,186.0
84,000.0
24.7
Microsoft Corporation
242,300.0
95,000.0
39.2

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Software Development in Europe

Products & Services Segmentation

Industry revenue broken down by key product and services lines.

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Top Questions Answered in this Report

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What is the market size of the Software Development industry in Europe in 2024?

The market size of the Software Development industry in Europe is €374.1bn in 2024.

How many businesses are there in the Software Development in Europe industry in 2024?

There are 472k businesses in the Software Development industry in Europe, which has grown at a CAGR of 2.7 % between 2019 and 2024.

Has the Software Development industry in Europe grown or declined over the past 5 years?

The market size of the Software Development industry in Europe has been declining at a CAGR of 2.8 % between 2019 and 2024.

What is the forecast growth of the Software Development industry in Europe over the next 5 years?

Over the next five years, the Software Development industry in Europe is expected to grow.

What does the Software Development in Europe include?

Systems software and Application software are part of the Software Development industry.

Which countries have the most businesses in the Software Development industry in Europe?

The European country with the most businesses in the Software Development industry is France.

How competitive is the Software Development industry in Europe?

The level of competition is high and increasing in the Software Development industry in Europe.

Related Industries

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Table of Contents

About this industry

Industry definition

Industry participants develop and adapt software, which includes writing, modifying and supporting computer code, databases and webpages. Developers also customise software so that it is functional within clients’ information system environment and offer select after-sale services.

Related Terms

Cloud ComputingSoftware As A Service (SAAS)Fintech

What's included in this industry?

Systems softwareApplication softwareSupport services

Companies

SAP SEAlphabet IncMicrosoft Corporation

Industry Code

ISIC 2006

6201 - Computer programming activities in Europe

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Performance

Key Takeaways

Developers benefit from innovation in computing procedures, including Fintech

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Revenue Highlights

Trends
  • Revenue
  • 2024 Revenue CAGR
  • Revenue Volatility

Employment Highlights

Trends
  • Employees
  • Employees per Business
  • Revenue per Employee

Business Highlights

Trends
  • Businesses
  • Employees per Business
  • Revenue per Business

Profit Highlights

Trends
  • Total Profit
  • Profit Margin
  • Profit per Business

Current Performance

Charts
  • Revenue in the Software Development in Europe industry (2011 -2029)
  • Employees in the Software Development in Europe industry (2011 -2029)
  • Business in the Software Development in Europe industry (2011 -2029)
  • Profit in the Software Development in Europe industry (2011 -2029)
Analysis

What's driving current industry performance in the Software Development in Europe industry?


Outlook

Analysis

What's driving the Software Development in Europe industry outlook?


Volatility

Analysis

What influences volatility in the Software Development in Europe industry?

Charts
  • Industry Volatility vs. Revenue Growth Matrix

Life Cycle

Analysis

What determines the industry life cycle stage in the Software Development in Europe industry?

Charts
  • Industry Life Cycle Matrix

Products and Markets

Highlights

Trends
  • Largest Market
  • Product Innovation

Key Takeaways

Custom-made software appeals to technical industries. Engineering and architectural businesses are heavily reliant on computer software to design, while scientific researchers use programs to measure processes and record data.

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Products and Services

Charts
  • Products and Services Segmentation
Analysis

How are the Software Development in Europe industry's products and services performing?

Analysis

What are innovations in the Software Development in Europe industry's products and services?


Major Markets

Charts
  • Major Market Segmentation
Analysis

What influences demand in the Software Development in Europe industry?


International Trade

Highlights

  • Largest Importer
  • Smallest Importer
  • Total Imports into Europe
  • Largest Exporter
  • Smallest Exporter
  • Total Exports into Europe
Heat maps
  • Industry Concentration of Imports by Country
  • Industry Concentration of Exports by Country
Data Tables

Value and annual change (%) included

  • Number of Imports and Exports by European Country (2024)

Geographic Breakdown

Business Locations

Heat maps
  • Share of Total Industry Revenue by Region (2024)
  • Share of Total Industry Enterprises by Region (2024)
  • Share of Total Industry Employment by Region (2024)
  • Share of Total Industry Wages by Region (2024)

Industry Geographic Breakdown

Data Tables

Values and annual change provided for 37 European countries:

  • Revenue (2024)
  • IVA (2024)
  • Enterprises (2024)
  • Employment (2024)
  • Exports (2024)
  • Imports (2024)

Competitive Forces

Highlights

Trends
  • Concentration
  • Competition
  • Barriers to Entry
  • Substitutes
  • Buyer Power
  • Supplier Power

Key Takeaways

Low concentration is a product of a saturated market. Low market share concentration reflects the fragmented nature of the industry outside of the global software houses.

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Supply Chain

Charts

Buyer and supply industries

Companies

Market Share

Charts
  • Industry Market Share by Company (2019-2024)

Companies

Data Tables

Top 10 companies by market share:

  • Market share (2024)
  • Revenue (2024)
  • Profit (2024)
  • Profit Margin (2024)

Data Tables
  • Countries of operation for SAP SE
  • Countries of operation for Alphabet Inc
  • Countries of operation for Microsoft Corporation
  • Countries of operation for Oracle Corporation
  • Countries of operation for International Business Machines Corporation
  • Countries of operation for Capgemini Service SAS
  • Countries of operation for Dassault Systèmes SE
  • Countries of operation for Atos SE
  • Countries of operation for Amadeus IT Group SA
  • Countries of operation for Software AG

External Environment

Highlights

Trends
  • Regulation & Policy
  • Assistance

Key Takeaways

Opportunities remain for small companies. Small software development businesses will flood the market in the coming years to take advantage of market niches, raising competitive pressures.

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External Drivers

Analysis

What demographic and macroeconomic factors impact the Software Development in Europe industry?

Financial Benchmarks

Highlights

Trends
  • Profit Margin
  • Average Wage
  • Largest Cost

Key Takeaways

Labour costs are high. Software development companies require specialised staff to conduct highly skilled and labour-intensive coding and testing tasks. The majority of workers have advanced qualifications so take-home big salaries.

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Cost Structure

Charts
  • Share of Economy vs. Investment Matrix
  • Industry Cost Structure Benchmarks:
    • Marketing
    • Depreciation
    • Profit
    • Purchases
    • Wages
    • Rent
    • Utilities
    • Other
Analysis

What trends impact cost in the Software Development in Europe industry?


Key Ratios

Data tables
  • IVA/Revenue (2014-2029)
  • Imports/Demand (2014-2029)
  • Exports/Revenue (2014-2029)
  • Revenue per Employee (2014-2029)
  • Wages/Revenue (2014-2029)
  • Employees per Establishment (2014-2029)
  • Average Wage (2014-2029)

Country Benchmarks

European Leaders & Laggards

Data Tables

Top and boottom five countries listed for each:

  • Revenue Growth (2024)
  • Business Growth (2024)
  • Job Growth (2024)

European Country Performance

Data Tables

Rankings available for 37 countries. Statistics ranked include:

  • IVA/Revenue (2024)
  • Imports/Demand (2024)
  • Exports/Revenue (2024)
  • Revenue per Employee (2024)
  • Wages/Revenue (2024)
  • Employees per Establishment (2024)
  • Average Wage (2024)

Structural Comparison

Data Tables

Trends in 37 countries benchmarked against trends in Europe

  • Concentration
  • Competition
  • Barriers to Entry
  • Buyer Power
  • Supplier Power
  • Volatility
  • Capital Intensity
  • Innovation
  • Life Cycle

Key Statistics

Industry Data

Data Tables

Including values and annual change:

  • Revenue (2014-2029)
  • IVA (2014-2029)
  • Establishments (2014-2029)
  • Enterprises (2014-2029)
  • Employment (2014-2029)
  • Exports (2014-2029)
  • Imports (2014-2029)
  • Wages (2014-2029)

Methodology

Where does IBISWorld source its data?

IBISWorld is a world-leading provider of business information, with reports on 5,000+ industries in Australia, New Zealand, North America, Europe and China. Our expert industry analysts start with official, verified and publicly available sources of data to build an accurate picture of each industry.

Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and IBISWorld's proprietary database of statistics and analysis to provide balanced, independent and accurate insights. 

IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools.

To learn more about specific data sources used by IBISWorld's analysts globally, including how industry data forecasts are produced, visit our Help Center.