NEW YORK, UNITED STATES – Market.us released an industry report regarding the growth of the global software development outsourcing market for the next ten years. The market is expected to be worth US$940.0B by 2034, at a compound annual growth rate (CAGR) of 5.8% for the duration of the forecast period.
The industry report also highlights the region, service type, deployment model, organization type, and industry vertical that has the largest market share.
- Region: North America, with a 34.7% share, generating US$185.6B in revenue (as of 2024), which is due to the strong technology ecosystem and widespread enterprise outsourcing
- Service Type: Application development, with a 42.7% share, which is due to the growing demand for customized, scalable, and innovative software solutions across industries
- Deployment Model: On-premise solutions, with a 61.5% share, which is due to the companies’ need to gain more control over their data and IT systems
- Organization Type: Large enterprises, with a 68.3% share, which is due to the need for complex, large-scale software solutions to support the companies’ diverse and sophisticated operations
- Industry Vertical: Banking, financial services, and insurance, with a 23.7% share, which is due to the need for digital transformation, enhanced cybersecurity, and regulations compliance
Factors Driving the Rise in Market Demand
Global companies have increased their reliance on third-party service or outsourcing providers to build, manage, and maintain their software systems. These providers have specialized services, such as AI, cybersecurity, and cloud integration, that they need to help innovate their operations and enhance their security.
Other reasons driving the growth of the global software development outsourcing market include the consistent shortage of skilled developers and the companies’ need to reduce operational costs. In the U.S. alone, 59% of businesses outsource about 300,000 IT-related jobs annually to benefit from the resulting cost savings.
