Software - Ethiopia

Ethiopia

In Ethiopia, the revenue in the Software market is projected to reach US$523.40m in 2024.
The market is dominated by Enterprise Software , with a projected market volume of US$208.80m in the same year.
It is expected that the revenue will show an annual growth rate (CAGR 2024-2029) of 11.64%, resulting in a market volume of US$907.50m by 2029.
In terms of global comparison, United States is expected to generate the most revenue, reaching US$363.40bn in 2024.
Ethiopia's software market is experiencing a surge of growth, driven by the government's focus on digital transformation and the rise of tech startups in the country.

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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Analyst Opinion

Ethiopia, a country located in the Horn of Africa, has been experiencing a significant growth in its Software market in recent years.

Customer preferences: The Ethiopian Software market has been driven by a growing demand for digital solutions in various sectors, including finance, healthcare, and education. With a population of over 100 million, Ethiopia has a large and young workforce that is increasingly tech-savvy and demands access to digital services. Additionally, the government has been promoting digitalization as a means to boost economic growth and improve public services, further driving the demand for software solutions.

Trends in the market: One of the key trends in the Ethiopian Software market is the increasing adoption of cloud-based solutions. As more businesses and organizations seek to digitize their operations, cloud-based software offers a flexible and cost-effective alternative to traditional on-premise solutions. Another trend is the rise of mobile applications, which are becoming increasingly popular among consumers and businesses alike. This is driven by the widespread use of smartphones in Ethiopia, which has one of the highest mobile penetration rates in Africa.

Local special circumstances: The Ethiopian Software market is characterized by a relatively small number of local software companies, with most of the demand being met by foreign firms. However, there is a growing number of local startups and entrepreneurs who are developing innovative solutions to meet the needs of the local market. Additionally, the government has been investing in the development of the local IT industry, with initiatives such as the creation of technology parks and the establishment of a national ICT policy.

Underlying macroeconomic factors: The growth of the Ethiopian Software market is underpinned by a number of macroeconomic factors. These include the country's rapidly growing economy, which has been averaging over 8% growth per year for the past decade. This has led to rising incomes and a growing middle class, which is increasingly demanding access to digital services. Additionally, the government has been investing heavily in infrastructure, including the expansion of the telecommunications network and the construction of new highways and airports. This has helped to improve connectivity and reduce the cost of doing business in the country, further boosting the growth of the 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.