For decades, there’s been little doubt that technology plays a major role in economic expansion around the world. The latest data on the software market was presented by Neeraj Agrawal and Logan Bartlett of Battery Ventures at the recent CloudNY event cohosted with FirstMark Capital. The figures shine a spotlight on the size and power of the software industry as the engine behind technology market growth and that of the U.S. economy as well. (Click here to view the entire presentation.) Consider the following findings on the software market overall:
- Global Software Market to Reach $1 Trillion by 2030 Analysts predict today’s $500 billion market to grow about 5 percent annually through 2050, which results in a $1 trillion dollar market by 2030
- Software Growth Drives U.S. GDP By 2020, software will grow nearly 7 percent to account for $2 trillion or 10 percent of the American economy.
- Software Employs 10 Million High-Wage American Workers Today, the 2.5 million people working for software companies are supported by another 7.5 million industry-related jobs. Importantly, these workers earn double the wage of the average American worker.
- SaaS Growth Outpaces that of Other Software While all segments of the software market continue to grow, SaaS spending is forecast to grow by an average of 18 percent annually from 2016-2020.
- SaaS has Reached the Mainstream A look at the global forecast shows SaaS software will account for almost as much global revenue as internal and on-premise software by 2020.
- Five Trends Combine for Future Software Growth Battery Ventures identified the five “forces” driving continued growth in the software industry: the continued health of existing software markets, the new expansion into niche markets, an increased preference for software over hardware expenditures, the increasing ability of software to do the jobs of services workers, and increasing acquisition of software companies by non-tech giants in order to bring development capabilities in house.
- The Cloud’s Potential is Massive Each existing software market segment continues to grow but the potential for cloud-based apps in terms of customers and revenue is significantly greater than that of other computing eras.