United Kingdom Software Development Market

The booming IT technology sector in the UK has reinforced the UK’s position as a tech leader in Europe and is closing the gap with other IT hub places such as Silicon Valley and Beijing.  In 2018, the UK tech industry was valued at $446 million. But a growth surge between 2020 and 2021, accelerated by digital innovation during the COVID pandemic, helped expand the UK tech ecosystem by 42% towards about $1 trillion milestone. According to Tech Nation's UK tech review in 2020, around 3 million people were hired in the UK's digital tech economy - an increase of 11% within two years. The presence of key players and a great talent pool and government initiatives towards digitization and modernization is set to drive the growth of the UK Software Development market. The U.K. Software Development market is analyzed to be EUR 45,270 million in 2021 and is projected to reach EUR 58,810 million in 2027, growing at a CAGR of 4.64% during the forecast period of 2022-2027.

One of the key elements of the UK’s software industry growth has been the rising availability of venture capital funds, surpassing £10 billion in 2019 and reaching £11.3 billion in 2020, which is more than any other European nation and higher than France and Germany combined. Besides, the UK government announced a scheme to subsidize new software investment by 100,000 small and medium-sized enterprises by up to 50% or a maximum value of £5,000.

By language, the software market is further fragmented into Java, Python, C#, JavaScript, TypeScript, PHP, Bash, SQL, Android, iOS and others. Above all, the JavaScript segment generated the greatest revenue among the languages and is analyzed to maintain its dominance in the region during the forecast period owing to various online applications inkling search engines, e-commerce websites, content management systems, responsive design, social media and phone apps among others.

By market demand, the market is segmented by In-house on Payroll, Hired from Secondment Providers, Hired Freelancers and Fully Outsourced. With a sufficient highly skilled and educated workforce, the in-house on payroll segment generated more than 50% of revenue share in 2021 and is set to boost the growth of the market in upcoming years. In addition, secondments are increasingly used to ease the often-complex arrangements that arise when bringing together staff from different organizations. In addition, the shortage of skilled software and web developers would boost the growth of the Software Development market by hiring employees from secondment providers and freelancers. 

By deployment type, the Cloud segment has been predominantly adopted compared to the on-premise software development segment. According to the International Trade Administration report, the UK is the largest cloud market in Europe and also is no. 1 in top scaling tech nation in Europe. Besides, the growing demand for public cloud services in this region has been supported by ongoing remote working shifts due to the COVID pandemic, which is set to fuel the growth of the Software Development market in the UK. The UK’s public cloud services reached about $12 billion in 2020 and accounted for about 4% of the global market. Major cloud providers in the UK include Amazon Web Services (AWS), Microsoft Azure and Google Cloud and they have partnerships with major UK companies.

In terms of business size, the enterprise segment contributed to the largest market share in 2021 based on the presence of major tech companies in the region. Some key players in this region include Hyperlink InfoSystems, Microsoft, Revolut and others. They are believed to have a positive influence on the growth of the large enterprise segment in the UK Software Development market.

 

By end-use industry,  the market is segmented into several end-use industries, including Banking and Financial Institutions, Insurance Firms, Media and Entertainment, Government, Defense, Telecommunication, Automotive, Consumer Goods and Retail, Healthcare, Manufacturing and others. The Consumer Goods and retail segment accounted for the dominant market share in 2021 owing to the growing e-commerce industry in the country, which in turn would boost its market growth. According to a recent UK government report, the volume of retail sales increased by 1.4% in November 2021 and was 7.2% higher than their pre-coronavirus (COVID-19) February 2020 levels. 

The base year of the study is 2021, with forecast done up to 2027. The study presents a thorough analysis of the competitive landscape, taking into account the market shares of the leading companies. The assessment includes the forecast, an overview of the competitive structure, the market shares of the competitors, as well as the market trends, market demands, market drivers, market challenges and product analysis. These provide the key market participants with the necessary business intelligence and help them understand the future of the U.K. Software Development Market.

 

The report segments the U.K. Software Development Market based on language, market demand, deployment type, business size and end-use industry in the following manner: