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The global independent software vendors (ISVs) market reached USD 265.6 BN in 2022 and is projected to grow to USD 910.7 BN by 2032, with a 13.6% CAGR during the review period (2023-2032). The market dynamics play a pivotal role in shaping the software industry. ISVs develop, market, and sell software independently, often specializing in niche solutions or catering to specific industries. Understanding the market dynamics surrounding ISVs involves analyzing key factors that influence their operations, growth, and competitiveness. One fundamental aspect of ISV market dynamics is innovation. The software industry is dynamic and ever-evolving, driven by the constant demand for new and improved solutions. ISVs must stay at the forefront of technological advancements to remain competitive. This involves investing in research and development to create cutting-edge software that addresses emerging needs and challenges.
The ability of ISVs to innovate distinguishes them in the market and determines their long-term success. Collaboration and partnerships are another crucial dimension of ISV market dynamics. Many ISVs rely on strategic alliances with other technology providers, resellers, or platform developers to expand their reach and enhance their offerings. Such partnerships can open doors to new markets, provide access to complementary technologies, and create synergies that benefit both parties. Forming and maintaining effective partnerships is a key factor in the growth and sustainability of ISVs. Market segmentation is inherent in the dynamics of ISVs, as they often focus on specific industries, business sizes, or use cases. Developing software solutions to meet the unique requirements of a particular sector allows ISVs to carve out a niche and establish themselves as experts in that domain. This targeted approach enables ISVs to understand the needs of their customers better, resulting in more effective marketing and product development strategies.
Globalization is another factor that significantly influences the market dynamics of ISVs. With the rise of the internet and cloud computing, ISVs can easily distribute and sell their software globally. This presents both opportunities and challenges. While it allows ISVs to tap into a broader customer base, it exposes them to increased competition. Successful ISVs navigate this landscape by understanding regional variations in demand, compliance requirements, and cultural nuances. The subscription-based business model has gained prominence in the ISV market dynamics. Many ISVs have transitioned from traditional one-time sales to subscription-based models, offering software as a service (SaaS). This shift provides a more predictable revenue stream and fosters stronger customer relationships through continuous updates and support.
The subscription model aligns with the trend of businesses preferring scalable and flexible solutions, driving the evolution of ISV pricing strategies. Regulatory compliance and data security are major concerns for ISVs, especially as digital transformation accelerates across industries. Compliance with international standards and regulations is essential for building trust with customers. ISVs prioritizing robust security measures and compliance with data protection laws position themselves as reliable partners in an era where data privacy is paramount.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Segment Outlook | Type, and Application |
Independent Software Vendors Market Highlights:
Independent Software Vendor Market Overview
Independent Software Vendor Market Size was valued at USD 425.70 Million in 2023. The Independent Software Vendor market industry is projected to grow from USD 504.03 Million in 2024 to USD 3,024.24 Million by 2032, exhibiting a compound annual growth rate (CAGR) of 23.80% during the forecast period (2024 - 2032). An independent software vendor (ISV) is a business or individual that builds, develops, and sells enterprise or consumer software to its end users. These software products run on more than one operating system (OS) or computer hardware platforms.
Even though ISV-provided software is consumed by end users, it is considered as the property of the vendors. According to MRFR analysis, the market is expected to register high growth during the forecast period. Increased demand for value-added services and OEM support for ISVs solution development and management are some of the factors responsible for the growth of the market during the forecast period.
As per Analyst at MRFR, “The rise of the mobile workforce raises the demand for collaboration tools, mobile apps, and remote access solutions, providing substantial growth prospects for ISVs that build appropriate software.”
FIGURE 1: INDEPENDENT SOFTWARE VENDOR MARKET SIZE 2019-2032 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Independent Software Vendor Market Opportunity
RISING DEMAND FOR CLOUD-BASED SOLUTIONS
The introduction of cloud technologies constituted an important turning point in software development history. Cloud computing refers to the supply of various computing services such as servers, storage, databases, networking, analytics, and more that are all accessible via the internet, indicating a paradigm shift in how technology resources are accessed and utilised. This transition from on-premises infrastructure to cloud-based services resulted in several revolutionary shifts. Cloud platforms such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud provided scalable architecture that allowed developers to simply add resources as needed.
This avoided the need for upfront hardware investments and allowed the flexibility to scale up or down dependent on demand. Cloud services can be accessed from any location with an internet connection, allowing for remote development, collaboration, and access to a worldwide talent pool. In a world where distributed teams and remote work have become the norm, geographical flexibility has become critical. Leading cloud providers have made significant investments in security and data redundancy, making cloud-based solutions safer and more dependable than many on-premises alternatives. Backups of data and disaster recovery have become more accessible and efficient. Due to all this demand for cloud-based software solutions is expected to be increasing significantly. This is presenting significant opportunity for ISVs developing and offering cloud-based solutions for various industries.
Independent Software Vendor Market Segment Insights
Independent Software Vendor Type Insights
Based on Type, the Independent Software Vendor Market segmentation Cloud-based, On-premises The cloud-based segment will be the majority share in 2022, contributing around 58.9% to the market revenue. Cloud provides a compelling platform for companies to securely manage their content and applications, with planetary scale and opportunities for innovation. Cloud services allow ISV partners to focus on their core goals of developing and delivering applications; and improving their cloud platform provider. According to the Cloud Adoption and Risk Report 2019, published by McAfee, the adoption of cloud-based applications, including the enterprise cloud application and consumer cloud applications, has witnessed significant growth across the verticals.
Cloud services offer immense opportunities to modernize businesses. It provides scalability that offers ISVs to be more agile with their resources and offers new prospects for integration and collaboration. Furthermore, the adoption of software-as-a-service (SaaS) provides better accessibility to secure and access data, whereas infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) provide a better platform to secure their workloads that ensures the underlying application and infrastructure components are not misconfigured.
FIGURE 2: INDEPENDENT SOFTWARE VENDOR MARKET, BY Type, 2022 VS 2032 (USD MILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Independent Software Vendor Application Insights
Based on the Application, the Independent Software Vendor Market segmentation is E-Commerce, Logistics, Retail, Healthcare, Financial, Educational, Others. Retail Applications dominated the market in 2022. Software applications developed by independent software vendors help retail vendors to offer a customer-centric experience. For retail applications, ISVs offers various solutions that include facilities management, business-centric e-commerce or business to customer solutions, enterprise resource planning (ERP) / customer relationship management (CRM), point-of-sale (POS) systems integration, inventory management, and web applications or portals which help the retailers to boost their business value.
By leveraging dynamic platforms offered by major key players in the market such as Oracle Corporation, Microsoft Corporation, and Salesforce.com, the ISVs develop applications in line with client requirements and advanced features, which increases customer satisfaction and helps the retailers to offer the solution with minimum time to market.
Independent Software Vendor Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific, Middle East and Africa and South America. The North America Independent Software Vendor market accounted for ~23.4% in 2022. It is expected to exhibit a significant CAGR growth during the study period. North America is one of the most critical regions for the ISV market. North America consists of countries such as the US, Canada, and Mexico. These countries have a large number of ISV providers.
For instance, in the US, some of the key ISVs are Ipswitch, Salesforce.com, Intuit Inc., Alpha Software. In Canada, some of the key ISVs include Endeavour, CRG Solutions, and MediaValet Inc. All these ISVs compete based on value-added features and services that they offer. According to TECH COM compuBase, a technology service provider, there were over 1500 ISVs in their database, in the region that provide varied software solutions. Some of the prominent software that ISVs offer in this region include industry-specific solutions and management & production related solutions.
The independent software vendors market in North America is mainly driven by the growing use of various enterprise solutions such as human capital management (HCM), expense management, financials, office suites, and collaborative solutions (mainly web conferencing technology) due to a highly distributed workforce.
Europe region consists of countries including Germany, France, Italy, the UK, and rest of Europe. The DACH region that include the following countries—Austria, Germany, and Switzerland, that have a significant number of ISVs. According to TECH COM compuBase, there were more than 6,938 companies in their database, offering software solutions in the countries mentioned. More than 40% of these ISVs offer management- and production-related software solutions and nearly 30% of these ISVs offer industry-specific software solutions. Following the DACH region, France is one of the prominent countries where a large number of ISVs operate. These ISV providers provide office automation and DBMS solutions, management and production solutions, and industry-specific solutions. Some of the key ISVs in the region include Itransition, Dassault System, Sopra Steria, MUREX S.A.S, and Cegid Group.
Moreover, countries such as the United Kingdom, Germany, and France have well-established software industries and host a considerable number of Independent Software Vendors (ISVs). The market share distribution among ISVs in Europe can differ based on factors such as country-specific regulations, industry focus, and customer preferences.
FIGURE 3: INDEPENDENT SOFTWARE VENDOR MARKET SIZE BY REGION 2022 VS 2032
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Further, the major countries studied in the market report are the U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, South Korea, and Brazil.
Independent Software Vendor Key Market Players & Competitive Insights
The independent software vendor market is characterized by the presence of many global, regional, and local players. The market is competitive, with all the players competing to gain maximum market share. The need for software solutions is on the rise across various industries. Many businesses are relying increasingly on software for streamlining their operations, gain competitive edge, and improving efficiency and growing adoption of cloud computing are key factors that drive the market growth.
According to MRFR analysis, the growth of the independent software vendor market is dependent on market conditions. The key vendors in the market are Hewlett Packard Enterprise Development LP (HPE), IBM Corporation, Micro Focus., Dell Inc., Google Inc, Apple, Inc, Salesforce, Microsoft, IBM Corporation, Oracle Corporation, SAP SE ServiceNow (US), Mocana (US), and Compuware Corporation.
These companies are focusing on enhancing their products with the integration of improved technologies. Moreover, these companies are providers of independent software and compete in the independent software vendor market to increase their geographic presence, expand their customer base, and form strategic partnerships.
The top 5 players in the strategy consulting market are Microsoft, Oracle, SAP SE, IBM Corporation and Salesforce.
Key Companies in the Independent Software Vendor market include
- IBM
- Microsoft
- SAP SE
- Salesforce
- Oracle
- Google, Inc.
- Apple Inc.
- Dell. Inc
- HPE
- Compuware(BMC)
- ServiceNow
- Symantec Corporation (Broadcom)
- Cisco Systems,Inc.
- Carbonite, Inc. (OPENTEXT)
- Mocana
Independent Software Vendor Industry Developments
- InOctober 2023, BMC Software announced that the Control-M platform has been awarded the overall highest score for the seventh consecutive time in the 2023 EMA Radar. Control-M and BMC Helix Control-M offer an innovative method for orchestrating data pipelines for more flexible and effective business operations.
- In March 2023, Intel partnered with its alliance’s Titanium member- Avalue and announced the ATX server board based on the latest 4th generation Intel Xeon SP CPU in which Using the baseboard management controller (BMC) and independent software vendor market (IPMI2.0), an administrator can access the system remotely 24/7, to adjust startup settings, real-time system health diagnostics, firmware, OS upgrades, and prearranged predictive maintenance
Independent Software Vendor Market Segmentation
Independent Software Vendor Type Outlook
- Cloud-based
- On-premises
Independent Software Vendor Application Outlook
- E-Commerce
- Logistics
- Retail
- Healthcare
- Financial
- Educational
- Others
Independent Software Vendor Regional Outlook
-
North America
- US
- Canada
- Mexico
-
Europe
- UK
- Germany
- France
- Italy
- Spain
- Rest of Europe
-
Asia-Pacific
- China
- Japan
- India
- Rest of Asia-Pacific
-
Middle East & Africa
-
South America
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