Software - ASEAN

ASEAN

The Software market in ASEAN is expected to generate a revenue of US$8.70bn in 2024.
Among the various segments, Enterprise Software is projected to dominate the market with a market volume of US$3.66bn in the same year.
Looking ahead, the market is anticipated to exhibit a compound annual growth rate (CAGR 2024-2029) of 6.87%, resulting in a market volume of US$12.13bn by 2029.
In comparison to other countries, United States is expected to generate the highest revenue, amounting to US$363.40bn in 2024.
In ASEAN, the software market is experiencing rapid growth with Vietnam emerging as a key player in software development and outsourcing.

Key regions: United States, Canada, Germany, China, Japan

Definition:

In general, software is defined as a set of instructions written as programming code to execute specific tasks on a computing device. The Software market covers a wide range of software products and solutions that are publicly sold by various companies. Most software solutions in this market are designed for professional use, but some can also be suitable for personal use. They can also range from basic productivity tools such as word processors and spreadsheets to complex software solutions such as project management tools, graphic design software, and enterprise resource planning software.

Products in the Software market can be obtained in two ways: as on-premises software that is sold via a transactional license or a subscription and as cloud-based software (software as a service/ SaaS) that is most frequently sold as a subscription.

Structure:

The market contains four markets that are based on the functionality of the software:

Productivity Software refers to application software that supports activities such as producing documents, spreadsheets, drawings, and presentations. This market includes Administrative Software, Collaboration Software, Office Software, Creative Software, and Construction and Design Software.
Enterprise Software refers to all software that supports essential large-scale business activities such as enterprise resource management, customer management, and supply chain activities. This market includes Enterprise Resource Planning Software, Customer Relationship Management Software, Business Intelligence Software, Supply Chain Management Software, Content Management Software, and Other Enterprise Software.
Application Development Software refers to software and tools that help the overall application development process.
System Infrastructure Software refers to software that provides the base framework for operating and managing organizational processes and services on hardware devices.

Additional Information:

The Software market comprises revenue and revenue change as the key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in this market include Microsoft, Adobe, SAP, Oracle, and Salesforce.

For more information on the displayed data, use the info button right next to the boxes.

Market

Region

Region comparison

Currency

Analyst Opinion

The ASEAN region has emerged as an attractive market for software companies due to its growing economy and increasing digitization.

Customer preferences: Customers in ASEAN countries are increasingly adopting digital technologies, leading to a rise in demand for software solutions. The region has a large and diverse population, with varying levels of technological sophistication, which presents a challenge for software companies to cater to the different preferences and needs of customers. However, the market potential is significant, as ASEAN countries have a combined population of over 650 million people.

Trends in the market: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are the largest software markets in the ASEAN region. These countries are experiencing a surge in demand for cloud-based software solutions, which offer flexibility and cost savings. Mobile applications are also gaining popularity, as more people access the internet through their smartphones. In addition, there is a growing trend towards the use of artificial intelligence (AI) and machine learning (ML) in software development, as companies seek to improve efficiency and productivity.

Local special circumstances: Each ASEAN country has its own unique cultural, economic, and political environment, which affects the software market. For example, Singapore is a highly developed city-state with a strong focus on innovation and technology, making it an attractive location for software companies. In contrast, Myanmar is a developing country with limited technological infrastructure, which presents challenges for software adoption. Understanding the local market dynamics is crucial for companies looking to enter or expand in the region.

Underlying macroeconomic factors: The ASEAN region is experiencing strong economic growth, driven by factors such as urbanization, a growing middle class, and increasing foreign investment. This has led to a rise in disposable incomes and greater spending power, which is fueling demand for software solutions. In addition, governments in the region are investing in digital infrastructure and promoting digital transformation, creating a favorable environment for software companies. However, there are also challenges such as regulatory barriers, intellectual property rights, and cybersecurity risks, which companies must navigate to succeed in the market.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises, except for the Enterprise Software segment, in which consumer (B2C) spending is not considered. Figures are based on the allocation to the country where the money was spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, level of digitization, GDP sector composition, and observed level of software piracy. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.