Custom Software Development Market Size - By Solution (Web-Based Solutions, Mobile App, Enterprise Software), End Use (BFSI, IT & Telecom, Healthcare, Government, Manufacturing, Retail), Deployment Model, Enterprise Size & Global Forecast, 2023 – 2032
Published Date: April - 2025 | Publisher: MIR | No of Pages: 240 | Industry: Media and IT | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationCustom Software Development Market Size
Custom Software Development Market size was estimated at USD 28.2 billion in 2022 and is expected to achieve a CAGR of more than 21.5% during the period from 2023 to 2032. Enterprise Resource Planning (ERP) solutions are driving the market growth by generating demand for customized solutions. ERPs usually need customization to match the distinct business processes and industry-specific requirements. Custom software developers are creating, integrating, and supporting these solutions, which is expanding the size of the market. ERP systems also produce data that requires use of specialized software for analysis, reporting, and business intelligence, thereby expanding the scope for custom software development.
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Increasing demand for business process automation is propelling the demand for the custom software development market. Companies are increasingly realizing the productivity and efficiency benefits of automation. Custom software developers play a crucial role in the formulation, execution, and support of customized automation solutions that fit the unique workflows & needs. With companies from various industries looking to automate processes and minimize manual work, demand for custom software to automate processes will keep increasing, hence driving market growth.
| Report Attribute | Details |
|---|---|
| Base Year | 2022 |
| Custom Software Development Market Size in 2022 | USD 28.2 Billion |
| Forecast Period | 2023 to 2032 |
| Forecast Period 2023 to 2032 CAGR | 21.5% |
| 2032 Value Projection | USD 198.6 Billion |
| Historical Data for | 2018 to 2022 |
| No. of Pages | 300 |
| Tables, Charts & Figures | 343 |
| Segments covered | Solution, Deployment Model, Enterprise Size, and End Use |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
The constrained IT investment budgets are able to curtail the market revenue of the custom software development by limiting the amount of money available for enterprises to invest in creating customized software solutions. Such a problem has the potential to result in less demand for the custom software development services as enterprises will prefer off-the-shelf software solutions with lower costs. Further, constrained budgets also affect the resources & capabilities of custom software development firms, rendering them incapable of competing with larger companies or even investing in research & development to develop new and innovative offerings.
COVID-19 Impact
The COVID-19 pandemic also spurred the digital transformation initiatives of most companies, which gave rise to the high demand for custom software development services. This was also fueled by the necessity for remote work solutions, online collaborative applications, and e-commerce websites to shift to the new norm. Additionally, the move toward digitalization presented opportunities for custom software development firms to provide customized solutions that solve the unique industry problems in the healthcare, logistics, and education industries.
Custom Software Development Market Trends
The growing investments in custom software development start-ups are enhancing the custom software development industry growth. These investments are giving these start-ups the required funds to innovate & create innovative solutions. The investors are seeing the growing need for customized software solutions in different industries, causing funding for these start-ups to boom.
For example, Builder.ai, which is a company focused on automating custom software development, in May 2023 raised USD 250 million from its Series D round of funding. Leading the investment were the Qatar Investment Authority, partnered with Iconiq Capital, Jungle Ventures, and Insight Partners. The financing process took the firm's overall funding to USD 450 million. Builder.ai figures the round would elevate its valuation by up to 80%.
Custom Software Development Market Analysis
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The custom software development market was dominated by the large enterprises segment, which held more than 58% market share in 2022. The AI development assistant in software development is hovering the strategy of large enterprises in the market. These assistants are able to automate & streamline several facets of the development process, such as performance optimization, code generation, and bug detection, with the help of AI technology.
For example, in June 2023, Harness Inc., a modern software delivery platform solution company, unveiled its AI Development Assistant (AIDA), an innovative AI assistant that will change the entire Software Development Life Cycle (SDLC). Unlike the traditional AI implementations in the field that primarily focus on code generation and support, this method brings major improvements to AI for software delivery. The inclusion of AI systems in custom software development will make it possible for large businesses to expand in the custom software development market.
Discover more about the important segments driving this market
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The IT & telecom segment of the custom software development market captured approximately 23% of its share in 2022, by way of technological innovations like 5G, IoT, AI, and edge computing, driving the growth of the IT & telecom segment in the market. These innovations are facilitating the creation of tailored software solutions that optimize networks, improve cybersecurity solutions, facilitate IoT integration, and deliver real-time data processing at the edge. This technology-led approach assists IT & telecom organizations in enhancing services, minimizing latency, and fulfilling the increasing needs of end users.
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North America custom software development market held 36% of revenue share in 2022. The collaborations between software development firms in North America are fueling the market growth. Collaborations enable companies to pool expertise & resources, thus enabling the creation of more extensive & innovative solutions.
For example, in March 2023, Replit entered into a strategic partnership with Google Cloud. According to the partnership, the Replit developers are able to use Google Cloud services and root models in their access via Ghostwriter, being Replit's AI software model for software construction. On the other hand, according to the agreement, Google Cloud and Workspace developers can find access to the collaborative code-editing tool belonging to Replit. Such agreements facilitate the entry to a higher number of technologies & expertise and thus support customized software construction suitable to the variable industry demands. Such alliances will ultimately enhance competitiveness and drive the market value.
Custom Software Development Market Share
The major companies operating in the custom software development market are
- Accenture plc
- ATOS SE
- Cognizant
- Tata Consultancy Services Limited
- Infosys Ltd.
- IBM Corporation
- Infopulse
These companies focus on expanding their service offerings to meet a broader range of client needs. This include adding new technology stacks, offering mobile app development, providing consulting services, or entering related fields like data analytics or cloud computing.
Custom Software Development Industry News
- In January 2023, Crowdbotics, a software development platform that offers a library of pre-built app architectures, secured an investment of USD 40 million through a successful Series B funding round. This round was led by NEA, with contributions from Homebrew, JSV, Harrison Metal, and Cooley. The freshly acquired funds will be directed toward the expansion of the company’s presence within the enterprise sector.
This custom software development market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments
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Market, By Solution
- Web-based solutions
- Mobile app
- Enterprise software
Market, By Deployment Model
- Cloud
- On-premises
Market, By Enterprise Size
- Large enterprises
- SMEs
Market, By End Use
- BFSI
- IT & telecom
- Healthcare
- Government
- Manufacturing
- Retail
- Others
The above information has been provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Nordics
- Asia Pacific
- China
- Japan
- India
- South Korea
- ANZ
- Southeast Asia
- Latin America
- Brazil
- Mexico
- Argentina
- MEA
- UAE
- South Africa
- Saudi Arabia
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