Software - Eastern Africa

Eastern Africa

The Software market in Eastern Africa is expected to reach a projected revenue of US$1.48bn in 2024.
Among the various segments, Enterprise Software holds the largest market share, with a projected market volume of US$0.61bn in 2024.
Over the forecast period from 2024 to 2029, the revenue is anticipated to exhibit a compound annual growth rate (CAGR) of 9.50%, leading to a market volume of US$2.33bn by 2029.
When compared globally, United States is expected to generate the highest revenue, amounting to US$363.40bn in 2024.
Eastern Africa's software market is booming, with a surge in demand for innovative solutions and a growing focus on mobile and cloud-based technologies.

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.

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Market

Region

Region comparison

Currency

Analyst Opinion

The Eastern African region is experiencing a significant growth in the software market, driven by various factors such as increasing internet penetration, government support for the sector, and a growing tech-savvy population.

Customer preferences: Customers in Eastern Africa are increasingly opting for cloud-based software solutions due to their flexibility, scalability, and cost-effectiveness. Additionally, there is a rising demand for mobile applications, particularly in the areas of e-commerce, finance, and healthcare.

Trends in the market: Kenya, Tanzania, and Uganda are leading the way in the Eastern African software market, with a growing number of start-ups and tech hubs emerging in these countries. In Kenya, for instance, the government has established Konza Technopolis, a flagship project aimed at creating a world-class technology hub that will attract both local and foreign investors. Furthermore, there is a growing trend towards software outsourcing, with companies in the region increasingly looking to outsource software development to countries such as India and China.

Local special circumstances: The Eastern African region is characterized by a young and tech-savvy population, with a growing number of graduates in science, technology, engineering, and mathematics (STEM) fields. Additionally, there is a growing culture of innovation and entrepreneurship, with many young people starting their own tech companies. However, the region also faces challenges such as inadequate infrastructure, limited access to finance, and a shortage of skilled personnel.

Underlying macroeconomic factors: The Eastern African region is experiencing strong economic growth, with GDP expected to grow by an average of 6% per annum over the next few years. This growth is being driven by various factors such as a growing middle class, increasing foreign investment, and government efforts to diversify the economy. Additionally, the region is experiencing a demographic dividend, with a large and growing young population that is increasingly tech-savvy and entrepreneurial.In conclusion, the software market in Eastern Africa is experiencing significant growth, driven by factors such as increasing internet penetration, government support for the sector, and a growing tech-savvy population. However, the region also faces challenges such as inadequate infrastructure, limited access to finance, and a shortage of skilled personnel. Nonetheless, with strong economic growth and a growing culture of innovation and entrepreneurship, the future looks bright for the Eastern African software 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.