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The global software licensing market is poised for substantial growth, projecting a Compound Annual Growth Rate (CAGR) of 8.8% from 2022 to 2027. This growth trajectory is delineated by a meticulous segmentation based on licensing type, deployment, and end-user considerations.
In the realm of licensing types, the concurrent use license segment has emerged as the frontrunner, capturing the largest market share at 25.6% in 2021. Following closely is the end-user license agreement segment, securing the second-largest share at 21.5% and contributing a noteworthy USD 477.8 million to the global software licensing market in the same year. This diversity in licensing types underscores the dynamic nature of the software licensing landscape.
Exploring the deployment facet, the Cloud segment has asserted its dominance by commanding the largest share, amounting to an impressive 85.3% of the global software licensing market in 2021. The valuation for this segment reached USD 1,897.5 million, indicating a robust preference for cloud-based licensing solutions. This significant market share underscores the escalating adoption of cloud-based deployment models, symbolizing a paradigm shift in software licensing practices.
Delving into end-user categories, the BFSI (Banking, Financial Services, and Insurance) segment emerges as the market leader, accounting for the largest share at 28.7% in 2021. This sector's substantial contribution to the global software licensing market reflects the critical role of software solutions in addressing the specific needs and complexities of the BFSI domain. The versatile applications of software licensing within this sector signify its strategic importance in optimizing operations and ensuring regulatory compliance.
The dynamics within the software licensing market are indicative of a robust and diversified landscape, with various licensing types catering to distinct industry needs. Cloud-based deployment models have experienced a surge in adoption, signaling a departure from traditional approaches. The dominance of the BFSI segment underscores the pivotal role of software licensing in driving innovation and efficiency within specific industries.
As the global software licensing market continues to evolve, the strategic adoption of diverse licensing types, the pervasive influence of cloud-based solutions, and the sector-specific applications within industries like BFSI are anticipated to shape the trajectory of growth. The forecasted CAGR of 8.8% paints a picture of sustained expansion, highlighting the increasing recognition of software licensing as an integral component of modern business operations.
Software Licensing Market Highlights:
Software Licensing Market Overview
Software Licensing refers to an agreement that takes place between a software vendor and a user in order to explain their responsibilities. It can also impose various restrictions that are associated with software usage. Software licenses provide the users with the authority to one or more than one copy without breaching the copyright. The agreements of software licensing mainly consist of disclaimers, warranties, and disadvantages of software liability. The global software licensing market is expected to grow along with the increase in demand for large IT enterprises such as Accenture, IBM, and Microsoft. The market of software licensing may witness a significant growth and reach a valuation of USD 5 billion by the end of 2030 at a CAGR of 13%. The main factor that is expected to drive the market can be the necessity to reduce the issues related to piracy. COVID-19 Analysis Due to the sudden outbreak of the COVID-19 pandemic, various industries and businesses have come to a halt. There is a huge loss of lives along with a major downfall of the economy. The demand and supply chains have been disrupted for the pandemic. Along with other global markets which include manufacture, finance, and tourism, the software licensing market has also been hit hard. However, it is expected that the market will overcome the downfall soon after the pandemic.
Market Dynamics
- Drivers
There are various factors that are responsible for driving the growth of the market which include the increase in the requirement of reduction of piracy issues and rise in the audit activities. Optimizing the needs of a license compliance audit is also a major factor that leads the market towards its growth.
- Opportunities
Expansion of the market is a great opportunity that can lead the software licensing business towards growth. An increase in cloud governance may offer the market an opportunity to expand which in turn will provide a major opportunity for the market of software licensing.RestraintLack of internal cross-functional collaboration might pose a huge restraining factor for the growth of the software licensing market. Another major restraining factor that can impede the growth of the market is the management of many licensing models.
- Challenge
Along with the drivers, there also come a few challenges that the market may face during the forecast period. The rise in the demand for open-source platforms may affect the software licensing industry in a negative way and hence, may stand as a challenge to the market of software licensing.Cumulative Growth AnalysisAccording to the software licensing market analysis, the market may experience a significant growth during the forecast period which may reach a valuation of USD 14.34 billion only if the CAGR rate is 8.6%. The increase in the rules and regulations associated with the software or a platform is enhancing the growth of the software licensing market. Technology Analysis The software or the platform is becoming extremely important in all the software industries which include automotive, telecommunication, and healthcare. Nowadays, the software is becoming more prominent for the devices that are mostly used in the healthcare sector under the rules and regulations. In Australia, the therapeutic goods legislation is responsible for covering the manufacturers of Software as a Medical Device (SaMD) products in order to obtain the conformity assessment certification.Segment OverviewThe market of software licensing is segmented into three major parts. They are by end-user, by deployment, and by licensing type. Here is a list of the software licensing market segments along with their sub-segments. By Deployment,
- On-premise
- Cloud-based
- Others
By Licensing type,
- GNU General Public License
- Workstation Licenses
- Proprietary license
- Concurrent use license
- End User License Agreement
- Others
By End-User,
- BFSI
- Human resources
- Education and Research
- Government and Defense
- Healthcare and Life Sciences
- Manufacturing
- Others
Regional Analysis The software licensing market size is segmented into five major regions which include North America, Europe, Latin America, Asia Pacific, and the Middle East and Africa. Among these five regions, Europe is expected to hold the largest share in the market of software licensing. This rise in Europe is because of the deployment of the market of software licensing that is majorly divided into two parts. One is the on-premises and the other one is the cloud-based. The presence of major vendors is making North America the leading region for the market of software licensing by revenues. Therefore it is expected that the North American region may show a significant growth in the market of software licensing during the forecast period. Also, Asia Pacific may show rapid growth in the global software licensing market for its increase in the transition from homegrown to commercial SLM systems. This may help in the rise of the adoption rate of various software licensing in the region of Asia Pacific.Competitive Landscape Recently, many new companies are joining the market of software licensing with various strategies which include expansion of the market, the introduction of new services, and forming partnerships with various companies that can offer better products. These strategies are being implemented for the growth of the market and these also help in increasing the customer base. IBM, Microsoft, and Accenture are the most prominent key players of the market of software licensing that are responsible for the rise in the share price of the market. Such markets often launch innovative technologies and offer effective services to stand out in the competition. Here is a list of the other key players that are responsible for enhancing the growth of the software licensing market.List of Key Companies:
- Flexera Software (US)
- IBM Corporation (US)
- Muduslink Global Solutions Inc. (US)
- Inishtech Technology Ventures Ltd. (Ireland)
- Microsoft Corporation (US)
- Accenture Plc. (Ireland)
- Safenet Inc. (US)
- Agilis International (US)
- Dimension Data (South Africa)
- HP Inc (US)
- Vector Networks (US)
- DXC Technology Company (US)
- Gemalto MV (Netherlands)
- Reprise Software (US)
- Snow Software (Sweden)
Recent DevelopmentsThe software producers started producing various types of licenses for the software to meet the constantly changing demands of the customers. Nowadays, the traditional software licensing models are transforming to become a new one that will be cloud-based. Hence, most of the organizations are switching to cloud based platforms. Report OverviewThe software licensing research report provides a detailed overview of the market along with the various software licensing market trends that are constantly changing in the market. It also outlines the various factors that are responsible for affecting the growth of the market such as the drivers, opportunities, challenges, and restraints. The geographic division of the market along with a detailed competitive analysis is also offered by the report. This research report briefly segments the market into three major parts which are described in detail in this report. This report is basically a qualitative and quantitative analysis of the market based on the various factors and the issues that comprise a market. Strategic profiling of the key players who are responsible for the growth of the market can also be found in this research report.Report Detail
- Historic Period: 2017-2019
- Base Year: 2020
- Forecast Period: 2020-2023
By Geographically,
- North America
- Europe
- Asia Pacific
- Latin America
- The Middle East and Africa (MEA)
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