Custom Software Development Services Market: Global Industry Analysis and Forecast (2024-2030)

The Custom Software Development Services Market size was valued at USD 7.51Billion in 2023 and the total Custom Software Development Services revenue is expected to grow at a CAGR of 8.77% from 2024 to 2030, reaching nearly USD 14.72 Billion by 2030.
Custom Software Development Services Market Overview:
Custom software development is the designing of software applications for a definite user or set of users within an association. It involves ordering, development, and release of a software product which is custom-made to a single detailed unit. With the emergence of new technological themes and the advancement of software development methodologies, the focus on customer centricity has increased as a result of the changing global technology landscape. In order to provide a superior user experience and introduce intelligent products to the market, organisations have begun to see software as a key element in introducing innovation across products and services. Software engineering firms in this context need more than just another fragmented offshore services provider. They want a strategic partner for software engineering services and products that can collaborate and carry out the long-term strategic goal for the product.

In today's digitalized world, every enterprise needs unique software applications. Custom software applications are now required and not just a luxury in order to enhance customer experience and offer them value that cannot be replaced. There are two options available to businesses when choosing custom software development. The first is to employ a group of software modification professionals to work within their company and utilise internal resources to finish the task. The second choice is to collaborate with a software development business that uses its own resources to solve their problem.

Companies all around the world are using a large number of custom software development services to improve their operational efficiency by integrating many systems into a single software application with a single screen. Real-time updates to enterprise data enable quicker and better decision-making. Firms choose the top custom application development company based on their needs.

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Custom Software Development Services Market Dynamics:
Increasing investments in smart cities

The custom development software services market is expected to be aided by rapid growth in investments in smart city projects in many countries globally. Smart city technologies use information and communication technologies to efficiently manage and operate urban services including transportation systems, water supply, and law and order. Smart cities use a system that uses internet capabilities for the transfer of data over a network without human interaction and minimal human-to-computer interaction. As smart cities use a host of software for efficient functioning, the demand for software is expected to increase. In 2022, more than 5000 smart city projects were under progress in India which were worth about USD 26.3 bn. Meanwhile, in the UK, communications infrastructure provider BAI Communications is to build a 5G-centric network, powered by Mavenir’s MAVedge offering, to accelerate the adoption of transformative digital services for sectors including manufacturing and logistics, education, and social care, as part of a smart city project for Sunderland City Council in 2021.In addition, The Ho Chi Minh City (HCMC) government signed an agreement with the state-run Vietnam Posts and Telecommunications Group (VNPT) in September 2022. They will collaborate to deploy a series of digital transformation projects for the 2022-2025 period, toward building a sustainable smart city.

Increasing number of small-medium enterprises across the globe.

Small and Medium Enterprises (SMEs) are non-subsidiary, impartial companies that rent fewer than a given quantity of employees. This range varies among countries, with the maximum commonplace higher limit being 250 employees in the European Union. In some countries, the restrict is ready at 200 employees, at the same time as the United States uses 500 employees as the benchmark. As of 2021, about 400 million SMEs form the spine of economies worldwide. They are a major supply of task advent globally, representing over ninety five% of companies and accounting for 60%-70% of employment. SMEs play a essential role in producing new jobs, especially in OECD economies and the European Union, wherein they constitute round 99% of all companies, create approximately 85% of latest jobs, and provide two-thirds of general non-public sector employment.

In the Global South, the improvement of SMEs is closely connected to increase in general employment. According to the International Finance Corporation (IFC), there are approximately nine.34 million formal ladies-owned SMEs across over a hundred and forty assessed nations. The IFC also highlights a major credit gap for these enterprises, expected at roughly USD287.2 Bn, which accounts for 30% of the total credit gap for SMEs.

The increasing number of SMEs is driving the demand for custom software development services. These services are cost-effective and enhance business efficiency. Custom software development addresses technological issues, security vulnerabilities, and other software-related challenges, thereby maintaining consistent performance. This demand is expected to significantly boost the Custom Software Development Services Market, potentially increasing its size by at least tenfold.



Rising IT spending globally

With an increase of 5.1% from 2021, global IT spending is expected to grow significantly during the forecast period. Despite the potential impact of the Omicron variant, economic recovery with high outlooks for digital market prosperity will continue to boost technology investments, according to MMR research. Inflation was a major concern for everyon. Central banks around the world were focusing on fighting inflation, with overall inflation rates expected to be reduced by the end of the 2023. Increasing prices and delivery uncertainty, exacerbated by the Russian invasion of Ukraine, have accelerated the transition in purchasing preference among enterprises.

In addition, Geopolitical disruption, currency fluctuations, and supply chain challenges are among the many factors vying for their time and attention, yet contrary to what we saw at the start of 2020, organizations are accelerating IT investments as they recognize the importance of flexibility and agility in responding to disruption. As a result, purchasing and investing preferences focused on areas including analytics, cloud computing, seamless customer experiences, and security. This shift had a positive impact on the custom software development services Market.



High Deployment Costs

The major restraint for custom software is a high upfront cost. The implementation of unique functionality requires the use of cutting-edge technologies. The project may need a team of experienced developers, designers, project managers, and QA engineers resulting in costs way higher compared to off-the-shelf solutions. The cost of developing custom software is relatively high for businesses, while market forces lower the cost of off-the-shelf software solutions. The cost of maintenance and support also adds up to the expenses of custom software. However, the cost of custom software development seems worth its functionality once it is implemented. Although the initial expenditure may pay in the long term, for certain organizations it may be quite daunting. Before using custom software, businesses need to have a solid return on investment (ROI). The product is more costly than the off-shelf choices, as with every custom product.

However, the higher productivity business and their employees may discover with custom software can rapidly compensate for those expenditures. As, Software development is expensive, especially in regions like the USA, Canada, or Western Europe. In North America, companies charge $100-$150/hour, while in Western Europe from $50/hour to $150/hour. If the domestic prices are too high for a business, they can outsource software development to regions like Eastern Europe or any other countries where the prices are affordable. In addition, many custom software projects fall somewhere between $50,000 and $250,000 to design and develop the application. The impact on cost is depending on the size of the software, software complexity, App Integrations, etc.
Custom Software Development Services Market Segment Analysis:
Based on the Deployment Type segment, the global Custom Software Development Services industry is segmented by SME’s and Large Enterprises. In 2023, large enterprises held a 63.96% share of the market. This large share may be attributed to many factors. Large organizations typically have extra complicated and diverse operational needs that require strong, sophisticated, and quite custom designed software program solutions, which off-the-shelf software program regularly fails to satisfy. They also have great monetary sources, letting them invest in custom software program development tailor-made to their particular requirements, presenting a aggressive area. Custom software offers better scalability to deal with enterprise growth and gives advanced integration competencies with present structures, ensuring easy and green operations. Moreover, lare organisations face higher security dangers and stringent regulatory requirements, making custom software program with more advantageous safety capabilities and compliance measures important. Efficient information control is important for these organizations, and custom software program answers can manage and analyze big volumes of facts extra correctly. enhancing customer experience is a top priority, and custom software can provide seamless and personalized interactions, improving satisfaction and loyalty. These factors make custom software development a strategic funding for huge businesses, resulting of their dominant market share.
Custom Software Development Services Market Regional Insights:
North America is expected to dominate the global a Custom Software Development Services Market with during the forecast period 2023-2030. North America hold 35.16% share Custom Software Development Services Market in 2023 as a result of the rising number of telecom customers utilising smartphones. This is thought to benefit the market for custom software development services industry through the forecast period. North American businesses concentrate on establishing projects based on software and analytics. In addition, the region contains a sizable population of software engineers, data analysts, and computer scientists who specialize in enterprise solutions and services. This factor immediately advantages the Custom software development firm in the USA and Canada. East Asian emerging economies, including India, China, and Japan, have made significant contributions to the technology and automation solutions driving the growth of the software development business.

In 2024, India is having the highest population of software developers across the world. The country's continued dominance in the GSLI is largely attributable to its excellent English proficiency and affordable services. It performs modestly in terms of digital skills and outputs, ranking 17th in terms of digital resonance. The world's population of software developers is growing at the quickest rate in China. Microsoft constructed the biggest IoT and AI lab in the world in Shanghai in 2019. Global investors may be put off if the trade dispute between the United States (US) and China and its technology industries worsens. China provides some of the lowest hourly software development rates in the world, similar to India. The perceived calibre of the developer population reflects the hesitation of purchasers regarding exceptionally low rates.



Custom Software Development Services Market M&A, JVs, Partnerships in last three years and planned in near future:



Sr. No
Date of Transaction
Company One
Company two
Details with market segment and strategic intent


1
June 10, 2022
Kanda
LaborSoft
Kanda’s New Collaboration with LaborSoft : LaborSoft is an all-in-one Employee & Labor Relations solution for HR professionals that can be configured to meet specific requirements, and can continue to evolve and adapt as an organization grows. They provide the business intelligence HR necessities to promote productivity, initiate and enforce corporate policy, and create a more unified and successful team. LaborSoft takes care of compliance and EEO so that businesses can focus on what truly matters – their people and HR data.


2
March 05, 2022
Kanda
Cloud Truth
Kanda’s Recent Collaboration with Cloud Truth :As configuration becomes increasingly distributed and decentralized, this inevitably leads to an exponential increase in the number of settings touched by each deployment, the number of people interacting with configuration settings, and the lack of a single standardized record of truth to describe an entire system. CloudTruth provides a centralized configuration for cloud and applications that solves this issue by organizing and simplifying parameters, secrets and ENV variables for DevOps and security.


3
October 11 2022
Accenture
Google Cloud
Accenture and Google Cloud announced a renewed commitment to growing their respective talent, expanding their joint capabilities, developing new solutions using data and AI, and providing enhanced support to help clients build a strong digital core and reinvent their enterprises on the cloud.



Custom Software Development Services Market Key Findings:

1. Custom Software Development Services Providers provide high impact services through strategically investing in IPs and infrastructure, revolutionary engagement models, cutting-edge product engineering software, and Software as a Service (SaaS) solutions. With effectively employing advanced technologies, this helps clients in introducing new innovative services more quickly and capitalizing on market conditions. By utilising comprehensive knowledge of cutting-edge technologies like Cloud, IoT, 5G, AI, ML, AR, and VR, providers help customers collaborate on the development of next-generation software products. The full software product engineering life cycle, from the pre-lifecycle to the maturity phase and finally the decline phase, is covered by the services offered by companies.

2. The number of custom software developers worldwide provides another indicator of the scale of the bespoke software development market. In 2021, there were 28.67 million software developers worldwide and it is expected to increase to 42 million in 2029. A software developer's average age is 36. The average age in North America is 39. The median age of Europe, the Middle East, and Africa (MEA) is 40, which is the highest of any region. In 2018, there were 5.5 million software developers in Europe, ranking second globally. By 2024, India is expected to surpass the US as the country with the greatest population of software engineers.

3. Custom software development projects can take from 1 to 9 months. The average time to develop a software is 4.5 months. Projects for developing custom software can take one to nine months. A software is developed in an average of 4.5 months. The cost of developing custom software varies range from $3,000 to $120,000. The cost would be significantly influenced by the size of the business and the degree of software sophistication required. Several different programming languages are used to create custom software. There are numerous other programming languages that may be used to create unique software, but PHP, JavaScript, C#, Java, and Python are among the most popular. By software type, custom software varies. Software created for finance, human resources, sales & marketing, supply chain, customer support, and other areas is included in this category. A company may commission custom software for any or all of these departments.

4. Custom software solutions are very necessary for highly regulated sectors. The financial sector, healthcare, transportation, and others are some examples. As some solutions can significantly simplify their day-to-day operations, these sectors require custom software. For instance, a lot of these companies send compliance reports. They must demonstrate that their procedures and goods meet all legal requirements. These companies can produce reports with ease and clarity thanks to specialised software. As a result, they can focus on other things and save a lot of time. In addition Custom software also used in fields where testing is prevalent. Before releasing a product to the general public, several sectors require extensive product testing. Standards for health testing must be met by other industries. Food producers, for instance, are required to test their products for certain health risks and custom software solution streamline and accelerate the procedure. As a result, above mentioned factors are driving the market growth across the world.

5. Custom software development services providers mainly focuses on Services like Web Development, Services like Software development and Multi-platform App development, Testing and QA, Cybersecurity, Managed IT services, and IT consulting. They are helping businesses to grow by emphasizing Transparency, Innovation, Creativity, and Longevity.
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Global Custom Software Development Services Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 7.51 Bn.


Forecast Period 2024 to 2030 CAGR:
8.77%
Market Size in 2030:
US $ 14.72 Bn.


 Segments Covered:
by Deployment Mode
Cloud-based
On-Premises


by End User
SME’s
Large Enterprises


by Solution Type
Web/desktop-based solutions
Mobile–Based Solutions



Custom Software Development Services Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)
Leading Custom Software Development Services Market, Key Players:
1. Accenture
2. Bourntec Solutions Inc.
3. Capgemini
4. Chetu Inc.
5. Cognizant Technology Solutions Corp
6. DEVTECHNOSYS
7. Elinext Group
8. Fingent Corporation
9. Flatworld Solutions Pvt. Ltd
10. HCL Technologies Ltd.
11. HP Inc.
12. Iblesoft Inc.
13. Infosys Limited
14. iOLAP
15. Kanda Software
16. Nix solutions ltd
17. Oxagile
18. SPEC INDIA
19. Tatva Soft
20. Trigent Software, Inc.

FAQs:
1. What are the growth drivers for the Custom Software Development Services market?
Ans. the rising adoption of smart technologies and increasing security investment are some of the major factors driving the demand for custom software development services.

2. What are the factors restraining the global Custom Software Development Services market growth during the forecast period?
Ans. High Deployment Costs is expected to be the major factors restraining the global Custom Software Development Services market growth during the forecast period.

3. Which region is expected to lead the global Custom Software Development Services market during the forecast period?
Ans. North America is expected to lead the global Custom Software Development Services market during the forecast period.

4. What is the projected market size and growth rate of the Custom Software Development Services Market?
Ans. The Custom Software Development Services Market size was valued at USD 7.51Billion in 2023 and the total Custom Software Development Services revenue is expected to grow at a CAGR of 8.77% from 2024 to 2030, reaching nearly USD 14.72 Billion by 2030.

5. What segments are covered in the Custom Software Development Services Market report?
Ans. The segments covered in the Custom Software Development Services market report are Deployment Type, Solution Type , End-User and Region.