Software - Kenya

Kenya

In 2024, the Software market in Kenya is expected to generate a revenue of US$303.70m.
The dominant player in this market segment is the Enterprise Software , with a projected market volume of US$130.90m in the same year.
Looking ahead, the revenue is expected to grow at an annual rate of 7.10% (CAGR 2024-2029), resulting in a market volume of US$428.00m by 2029.
When compared globally, United States is expected to generate the highest revenue in the Software market, with a projected amount of US$363.40bn in 2024.
Kenya's software market is experiencing a surge in demand for mobile payment solutions due to the country's high mobile penetration rate.

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

Kenya is a country in East Africa that has been experiencing rapid economic growth in recent years. The software market in Kenya is also developing at a fast pace, driven by various factors such as customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Kenyan customers are increasingly demanding software products that are tailored to their needs. This has led to the development of niche software products that cater to specific industries such as agriculture, healthcare, and finance. Additionally, customers are also looking for software products that are affordable and easy to use, which has led to the rise of cloud-based software solutions.

Trends in the market: One of the major trends in the software market in Kenya is the adoption of mobile and cloud-based solutions. With the majority of Kenyans accessing the internet through their mobile phones, software companies have developed mobile applications to cater to this market. Additionally, the rise of cloud-based solutions has made it easier for small and medium-sized enterprises (SMEs) to access software products without having to invest in expensive hardware.Another trend in the software market in Kenya is the development of open-source software solutions. Open-source software has gained popularity in Kenya due to its affordability and the fact that it can be customized to meet specific needs. This has led to the growth of local software development communities that are focused on developing open-source solutions for various industries.

Local special circumstances: Kenya has a large population of young and tech-savvy individuals who are driving the growth of the software market. Additionally, the government has been supportive of the growth of the technology industry, which has led to the development of various technology hubs and incubation centers across the country. These hubs provide a platform for local software developers to collaborate and develop innovative solutions.

Underlying macroeconomic factors: The Kenyan economy has been growing at a steady rate over the past few years, which has led to increased investment in the technology industry. Additionally, the government has been investing in infrastructure development, particularly in the area of internet connectivity, which has made it easier for software companies to operate. The growth of the technology industry has also led to the creation of job opportunities for young Kenyans, which has contributed to the overall economic growth of the country.

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.