South Africa Software Development Market - Forecast(2024 - 2030)

Report Code: ITR 0436 Report Format: PDF + Excel

South Africa Software Development – Market Overview

The South Africa Software Development Market size is valued at USD 1.2 billion in 2023 and is expected to reach a value of USD 3.4 billion by 2030 at a CAGR of 6.2% during the forecast period 2024-2030. According to a report by International Trade Administration, South Africa has one of the largest information and communications technology (ICT) markets in Africa and is a regional leader in the mobile software field, security software as well as electronic banking services. In South Africa, Software Developments are resourcing options to help facilitate intra- and inter-departmental mobility, conduct the tasks of an existing position or undertake special projects. Since the COVID-19 pandemic, there has been a strong need for the authority of South Africa as well as companies to provide services to the public. Since the COVID-19 outbreak, South Africa has been experiencing a shortage of skilled manpower in software. Additionally, the importance of Internet equipment and software for remote work and telemedicine is being emphasized, thus the Software Development market is expected to continue to grow in the coming years.

Report Coverage

The report: “South Africa Software Development Industry Outlook – Forecast (2024-2030)” by IndustryARC covers an in-depth analysis of the following segments in the Japan Software Development Industry.

  • By Language: Java, Python, C++, JavaScript, TypeScript, PHP, Bash, SQL, Android, iOS 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, Enterprise 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 and Others.

Key Takeaways

  • The growth of the South African software development market is being driven by a number of factors, including the growing demand for digital transformation, the increasing adoption of cloud computing, the rise of AI and ML, and strong government support.
  • The South African software development market is highly competitive and fragmented. There are a number of large and small software development companies operating in the market, each with their own unique strengths and weaknesses.
  • Despite the challenges, the South African software development market is expected to continue to grow in the coming years. This growth will be driven by the factors mentioned above, as well as the growing demand for software applications in all sectors of the South African economy.

South Africa Software Development – Market Scope and Coverage

The base year of the study is 2023, with a forecast done up to 2030. 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 South Africa Software Development Market. 

South Africa Software Development – by Language

By language, the software market is further fragmented into Java, Python, C++, JavaScript, TypeScript, PHP, Bash, SQL, Android, iOS and others. the JavaScript segment generated the greatest revenue among others. It is analyzed to maintain its dominance in the region during the forecast period, owing to the growing demand for JavaScript developers in the country with a minimum of 3+ years of solid exposure at a professional level. As JavaScript is used in building various online applications inkling search engines, eCommerce websites, content management systems, responsive design, social media and phone apps, the segment is analyzed to grow at a higher rate. In South Africa, there are several software training institutes providing courses and training sessions in various programming languages, which is set to propel its market growth as well. 

South Africa Software Development – by Market Demand

By market demand, the market is segmented by In-house on Payroll, Hired from Secondment Providers, Hired Freelancers and Fully Outsourced. In 2021, the in-house on payroll segment accounted for the dominant market share owing to the recent government favorable policies supporting the in-house on payroll segment. The growing trend toward the development of software in-house coupled with the availability of a cheap skilled workforce in the region is considered to fuel the growth of the South Africa Software Development market. In addition, the increasing number of tech startups in South Africa is analyzed to have a positive effect on the market growth by hiring secondment providers or freelancers. 

South Africa Software Development – by Deployment Type

By deployment type, the Cloud segment has been predominantly adopted compared to the on-premise software development segment. Especially across large enterprises, the adoption of the Cloud is analyzed to contribute to the growth of the Software Development market in South Africa. Based on the availability of bandwidth, data security and low cost of broadband, the Cloud segment is estimated to grow at a higher rate in the forecast period.

South Africa Software Development – by Business Size

In terms of business size, small and medium business segment plays a crucial role in the South Africa Software development market, rather than large enterprise and government segments. The McKinsey report found that South Africa’s small and medium businesses account for more than 98% of the business and hire more than 50% of the country’s national workforce. The implementation of new technologies and digitalization in SMEs would offer various growth opportunities and enhance cost-effectiveness. Besides, South Africa’s government has a major focus on software and ICT facilities in public administration. 

South Africa Software Development – By End-use Industry

By end-use industry,  the market can be segmented into Banking and Financial institutions, Insurance Firms, Media and Entertainment, Government, Defense, Telecommunication, Automotive, Consumer Goods and Retail, Healthcare, Manufacturing and others. The Government segment generated the greatest revenue in 2023 due to the recent government plans to drive digital transformation and accelerate skills development and capacity building, which in turn would boost its market growth. 

South Africa Software Development Market drivers

According to Fitch Solutions and International Trade Administration data, the contribution of the South African IT industry to its GDP in 2023 is estimated to be about 2% and it is expected to grow by about 11% year-on-year in 2024. In the future, software development is expected to lead the growth of South Africa's IT industry. The steep growth of the e-commerce market is the main growth factor in the market. South Africa's e-commerce and online retail sales market have increased by 66 percent during the year 2021. Furthermore, the fast-growing mobile industry in the region is expected to be fueling the Software Development market. In 2023, 36.45 million South Africans were found to have an access to the internet through any kind of mobile device. The mobile internet penetration rate is expected to reach 62.93% by 2024. Based on this, the South African telecommunications market is also rapidly developing. In 2021, 5G service was commercialized for the first time in the African continent and major telecommunications companies including Vodacom, MTN and Rain are providing 5G services in urban areas. Consequently, the secondment of employees for purposes of software development is a feasible methodology. 

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1. South Africa Software Development Market - Market Overview
    1.1 Definitions and Scope
2. South Africa Software Development Market - Executive Summary
3. South Africa Software Development Market - Startup companies Scenario Premium Premium  
    3.1 Top startup company Analysis by
        3.1.1 Investment
        3.1.2 Revenue
        3.1.3 Market Shares
        3.1.4 Market Size and Application Analysis
        3.1.5 Venture Capital and Funding Scenario
4. South Africa Software Development Market – Industry Market Entry Scenario Premium Premium  
    4.1 Regulatory Framework Overview
    4.2 New Business and Ease of Doing business index
    4.3 Case studies of successful ventures
    4.4 Customer Analysis - Top Companies
5. South Africa Software Development Market - Market Forces
    5.1 Market Drivers
    5.2 Market Constraints
    5.3 Market Opportunities
    5.4 Porter’s five force model
        5.4.1 Bargaining power of suppliers
        5.4.2 Bargaining powers of customers
        5.4.3 The threat of new entrants
        5.4.4 Rivalry among existing players
        5.4.5 Threat of substitutes 
6. South Africa Software Development Market - Strategic analysis
    6.1 Value chain analysis
    6.2 Opportunities analysis
    6.3 Market life cycle
    6.4 Suppliers and distributors Analysis
7. South Africa Software Development Market – by Language (Market Size - $Million)
    7.1 Java
    7.2 Python
    7.3 C++
    7.4 JavaScript
    7.5 TypeScript
    7.6 PHP
    7.7 Bash
    7.8 SQL
    7.9 Android
    7.10 iOS
    7.11 Others
8. South Africa Software Development Market – by Market Demand (Market Size - $Million)
    8.1 In-house on Payroll
    8.2 Hired from Secondment Providers
    8.3 Hired Freelancers
    8.4 Fully Outsourced
9. South Africa Software Development Market – by Deployment Type (Market Size - $Million)
    9.1 On-Premise
    9.2 Cloud
10. South Africa Software Development Market – by Business Size (Market Size - $Million)
    10.1 Small and Medium Business
    10.2 Enterprise
    10.3 Government
11. South Africa Software Development Market - by End-use Industry (Market Size - $Million)
    11.1 Banking And Financial Institution
    11.2 Insurance Firms
    11.3 Media and Entertainment
    11.4 Government
    11.5 Defense
    11.6 Telecommunication
    11.7 Automotive
    11.8 Consumer Goods and Retail
    11.9 Healthcare
    11.10 Manufacturing
    11.11 Others

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