Software - South Africa

South Africa

In 2024, the projected revenue in the Software market in South Africa is estimated to reach US$2.46bn.
The dominant player in this market segment is Enterprise Software , with a projected market volume of US$1.05bn in 2024.
Looking ahead, the revenue is expected to grow at an annual growth rate (CAGR 2024-2029) of 3.98%, resulting in a market volume of US$2.99bn by 2029.
When compared globally, United States is anticipated to generate the highest revenue in the Software market, reaching US$363.40bn in 2024.
Despite challenges, South Africa's software market is experiencing significant growth, driven by increased investment in technology and innovation.

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

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Currency

Analyst Opinion

South Africa, a country located at the southernmost tip of Africa, has a developing software market that has been growing in recent years.

Customer preferences: South African customers are increasingly turning to software solutions to streamline their business operations and improve their productivity. Many businesses in South Africa are small and medium-sized enterprises (SMEs) that are looking for affordable and efficient software solutions to help them compete with larger companies. In addition, South African consumers are increasingly using software for personal use, such as social media, online shopping, and entertainment.

Trends in the market: One of the major trends in the South African software market is the shift towards cloud-based solutions. Cloud-based software is becoming increasingly popular among South African businesses due to its flexibility, scalability, and cost-effectiveness. Another trend is the increasing use of mobile devices, which has led to a growing demand for mobile applications. South African businesses are also increasingly using software to automate their processes, such as accounting and payroll.

Local special circumstances: South Africa has a unique market due to its diverse population and languages. This has led to the development of software solutions that cater to specific languages and cultures. In addition, the South African government has been promoting the development of local software solutions through initiatives such as the Technology Innovation Agency (TIA) and the Department of Trade and Industry's Technology and Human Resources for Industry Programme (THRIP).

Underlying macroeconomic factors: The South African software market is influenced by a number of macroeconomic factors, including the country's economic growth, political stability, and technological infrastructure. The South African economy has been growing slowly in recent years, which has affected the growth of the software market. In addition, political instability and corruption have led to a lack of confidence in the South African business environment. However, the country has a well-developed technological infrastructure, with a high level of internet penetration and a growing number of tech startups.

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.