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Denmark Software Development Market Overview
The market for Denmark Software Development is analyzed to be €3,136m in 2021 and is projected to grow at a CAGR of 6.04% during the forecast period 2022-2027. Denmark now has world-class software developers, particularly in the areas of security and encryption, business solution development, eGovernment solutions and acoustics software. The COVID-19 pandemic has sparked a surge in demand for employee engagement management and analytics software. This promotes the use of cloud/hybrid setups and opens up chances in Denmark to utilize digital solutions such as work-at-home agents (WAHA), self-service bots and AI-enabled solutions. Cloud-to-cloud migration has resulted from rising demand for cloud solutions and fierce market competition. Vendors can now offer contact center solutions on a subscription basis, allowing clients to buy only the seats and capabilities they require and dynamically change the configuration to meet changing operational demands. According to the Statista Research Department, in the following years, a growing portion of Denmark's IT infrastructure would be cloud-based. Nearly half of the questioned IT executives from large Danish companies predicted that infrastructure cloud usage would approach 60% in five years from 2018, compared to only 4% who predicted this in one year from 2018.
Report Coverage
The report: “Denmark Software Development Market – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments of the Denmark Software Development market.
By Language: PHP, .NET, Lua, Python, Go, Android, IOS, Java, Javascript, C++, Scala, Ruby, LISA, SQL, Perl and others.
By Market Demand: In-House on Payroll, Hired from Secondment Providers, Hired Freelancers and Fully Outsourced.
By Deployment Type: On-premise and Cloud.
By Business Size: Small and Medium Business, Enterprises and Government.
By End-use Industry: Banking and Financial Institution, Insurance Firms, Media and Entertainment, Government, Defense, Telecommunication, Automotive, Consumer Goods and Retail, Healthcare, Manufacturing, Energy & Utilities, Travel & Logistics, Fintech, eCommerce and others.
Key Takeaways
The in-house on payroll segment held the highest share in 2021, owing to the preference of the people to work on an in-house on payroll scheme. In Denmark, roughly 56% of software employees are on the in-house payroll.
Banking and Financial Institutions have dominated the Denmark Software Development Market with a market share of 18% as of 2021, as the Danish IT industry is supported by the banking sector.
The second key driver is the growing technology and start-up hub. According to the EU Digital Economy and Society Index, the country is among the top three EU countries in terms of digital competitiveness, closely followed by Finland and Sweden.
Denmark Software Development Market Segmentation Analysis – by Market Demand
By Market Demand, the in-house on payroll segment held the highest share in 2021 owing to the preference of the people to work on an in-house on payroll scheme. In Denmark, roughly 56% of software employees are on the in-house payroll. Since Denmark has no legal minimum wage, market demand for in-house payroll is significant. Instead, relatively high wages are negotiated between companies and labor unions regularly. Around 67% of Danish workers belong to a labor organization. Many countries, including France, find inspiration in Denmark's approach to labor market changes. However, the fully outsourced segment is also analyzed to grow at a higher rate since. Denmark is known for its excellent work-life balance, which leads to higher productivity and job satisfaction. The demand for employee outsourcing is growing. Denmark's workforce is widely regarded as one of the most productive and diligent in the world. Although Danish is the official language of the country, the majority of the population speaks English fluently, making it relatively simple to integrate new Danish employees into a remote team.
Denmark Software Development Market Segmentation Analysis - by End-use Industry
Banking and Financial Institution has dominated the Denmark Software Development Market with a market share of 18% as of 2021. The Danish IT industry is supported by the banking sector. Copenhagen, Denmark's capital, is positioning itself as a new fintech center capable of attracting the greatest IT programmers in the financial sector. The banking sector in Denmark is highly concentrated, with the three largest banks - Danske Bank, Nykredit Realkredit and Nykredit – owning 50% of the country's total banking assets. The financial sector's workforce is still shrinking, with 35,555 people employed in 2020 compared to 40,907 in 2000. Denmark supposedly had 58 banks and seven mortgage banks in 2020. Since 2000, when there were 185 banks and 10 mortgage banks, there has been a steady drop in the number of banks. However, the trend has halted since the financial crisis. The telecommunication segment is also analyzed to grow at a higher rate since Denmark's wireless and mobile business is one of the most advanced in the world for communication technologies and software development. Huawei, Samsung, Microsoft, Intel and Google are among the worldwide firms that have already invested in research and development facilities in Denmark. With around one thousand employees each, Telenor AS and Kemp & Lauritzen A/S ranked first among the top ten telecommunication firms in Denmark as of August 2021.
Denmark Software Development Market – End-use Industry (%) for 2021
Denmark Software Development Market Drivers
Denmark is a top location for tech activities:
In the World Bank's Doing Business Report, Denmark ranked first in Europe and fourth globally for ease of doing business. Denmark is one of the most digitized economies and societies among the 28 EU member nations, according to the European Commission's yearly assessment (2020). This is a result of Denmark's excellent IT infrastructure and technologically savvy populace. 85% of Denmark’s population are online and actively using a variety of online services, indicating that their digital abilities are advanced. In fact, all communications between citizens and government agencies are conducted via the internet. Denmark's government is committed to becoming one of the world's leading ICT nations. Denmark has made a significant impression on the worldwide software development scene. Danish researchers invented a number of popular programming languages, including C++, TurboPascal and Visual Prolog. Security and encryption, algorithms, AI/ML, wireless network solutions, eGovernment solutions, acoustics software and robotics are just a few of the sectors where Denmark has world-class software development talent. Because Denmark is a tiny, highly integrated and homogeneous society, consumers are frequently involved in the development of new technology and are quick to adapt to it. International firms benefit from using Denmark as a test market because they can swiftly alter and improve a product at a low cost before releasing it on the global market. Research and development facilities are on par with the best in the world. With recently constructed innovation and development centers/hubs in Denmark, global firms such as IBM, Microsoft and SAP attest to this.
Growing technology and start-up hub:
The second key driver is the growing technology and start-up hub. According to the EU Digital Economy and Society Index, the country is among the top three EU countries in terms of digital competitiveness, closely followed by Finland and Sweden. In 2018, Denmark was ranked 6th in the Global Entrepreneurial Index, which assesses the health of entrepreneurship ecosystems in 137 nations. Moreover, there are a few areas in which Denmark stands out in the technology/ICT sector. With internationally recognized companies such as Bang&Olufsen, Brüel & Kjaer and Oticon Robotics, Denmark is a global leader in the audio and sound technology industry. The country takes pride in having some of the best robot and drone testing facilities in the world, including full-scale test facilities for drone and robot applications in healthcare, agriculture and manufacturing.
Denmark Software Development Market Challenge
The current shortage of IT and digital skills and specialists:
Security and encryption, algorithms, AI/ML, wireless network solutions, eGovernment solutions, acoustics software and robotics are just a few of the sectors where Denmark has world-class software development talent. Denmark gets high demand for Danish computer experts from throughout the world. Danish computer scientists are known for their ability to provide holistic user-driven solutions, their capacity to innovate and integrate complicated software systems and their mathematic skills in inventing algorithms for artificial intelligence and cryptology, among other things. To nurture state-of-the-art computer scientist talents, a combination of universities nurturing talent and enterprises further developing these capabilities to applicable domains is critical. With such a critical public digital agenda and a drive for the adoption of cutting-edge technologies, Danish technology companies face one major challenge: the existing shortage of IT and digital skills and expertise. By 2030, Denmark would have a shortage of 19,000 ICT specialists. According to another projection, by 2025, there would be a need for 6,500 engineers and 3,500 science graduates. Factors like these are some of the major challenges that are restraining the growth of the underlying market.
Denmark Software Development Market Competitive Landscape
Product launches, acquisitions, market penetration and R&D activities are key strategies adopted by players in the Denmark Software Development market. The top 10 companies in the Denmark Software Development market are:
Adapt Agency
MAKROPOL
Crown Tech
LoadstarSoft
Livatek
Intelligent System AS
Apidemia
B5 Digital
IT Offer
PurpleFire
Recent Developments
In 2020, Microsoft made the largest investment in Denmark in its 30-year history, announcing Denmark as the site of its next sustainable datacenter zone and a pledge to train an estimated 200,000 Denmark citizens by 2024. The datacentre area, which is powered entirely by renewable energy, would give Danish customers of all sizes speedier access to the Microsoft Cloud, as well as world-class security and the flexibility to store data at rest in Denmark. Microsoft's investment would help to create new prospects for digital growth, digitalization of the public sector, digital innovation in Danish businesses and, last but not least, the use of technology that can help to create a more sustainable future.
In 2021, Advania AB, a renowned full-service IT company in Northern Europe, announced the acquisition of Genia ApS in Denmark, a hosting specialist. Genia Aps has been delivering IT operations, cloud & hosting and on-premises IT services since 2008. Advania, based in Denmark, specializes in Microsoft 365 and Azure hardware and infrastructure, with an emphasis on Hybrid Cloud, Workspace Infrastructure and Identity & Access Management.
Google opened a Danish data center in Fredericia in November 2020, after starting work on it in 2018. DKK 4.5 billion (about $733 M) was spent on the facility. It resulted in the creation of 150 employment and was accompanied by the purchase of 160MW of power from Danish solar farms.
Relevant Reports
Report Code: CMR 1206
Report Code: HCR 0016
Report Code: ITR 0097