Software - Sri Lanka

Sri Lanka

The Software market in Sri Lanka is expected to experience significant growth in the coming years.
By 2025, the projected revenue is estimated to reach a staggering US$535.40m.
Within this market, Enterprise Software is expected to dominate, with a projected market volume of US$250.90m in 2025.
Furthermore, the Software market in Sri Lanka is anticipated to exhibit a promising annual growth rate (CAGR 2025-2029) of 6.53%.
This growth trajectory is projected to result in a market volume of US$689.50m by the year 2029.
When compared to other countries globally, it is noteworthy that United States is anticipated to generate the highest revenue in the Software market.
In 2025, it is estimated that United States will generate a substantial revenue of US$379.30bn.
This further exemplifies the global dominance of the United States in the Software market industry.
Sri Lanka's software market is rapidly growing, with an increasing number of local software development companies gaining international recognition.

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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Region

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Analyst Opinion

Sri Lanka, a small island nation in South Asia, has been experiencing significant growth in its software market in recent years.

Customer preferences: Sri Lanka's software market has been driven by increasing customer demand for digital solutions, particularly in the areas of e-commerce, fintech, and mobile applications. With a growing middle class and increasing internet penetration, consumers are increasingly turning to digital platforms for their daily needs. This has led to a surge in demand for software solutions that can provide convenience, security, and efficiency.

Trends in the market: One of the key trends in Sri Lanka's software market is the rise of local startups. These companies are leveraging the country's growing pool of tech talent to develop innovative solutions that cater to the needs of local consumers. Another trend is the increasing adoption of cloud-based solutions, which offer flexibility, scalability, and cost savings for businesses of all sizes. Finally, there is a growing trend towards the development of artificial intelligence (AI) and machine learning (ML) solutions, which have the potential to transform a wide range of industries.

Local special circumstances: One of the unique characteristics of Sri Lanka's software market is its focus on niche solutions. Unlike larger markets such as India or China, Sri Lanka's software industry is relatively small and specialized, with many companies focusing on specific niches such as healthcare, education, or logistics. This has allowed local companies to develop deep expertise in their respective fields and provide tailored solutions to their customers.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of Sri Lanka's software market. These include a supportive government policy, which has encouraged the development of the country's tech industry through initiatives such as tax incentives and funding for startups. Additionally, Sri Lanka's strategic location and strong ties with other countries in the region have helped to attract foreign investment and foster international collaboration. Finally, the country's strong education system has produced a large pool of highly skilled tech professionals, which has helped to fuel the growth of the software industry.

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.