USD 33.54 Billion
Custom Software Development Market Size, Share, and Growth Analysis
Custom Software Development Market Size, Share & Trends Analysis Report, By Type (Web-based Solutions, Mobile App, Enterprise Software), By Deployment (Cloud, On-premises), By Organization Size, By Vertical, By Region, And Segment Forecast, 2025-2032
Report ID:
SQMIG45E2322 |
Region:
Global |
Published Date: April, 2025
Pages:
196
|Tables:
119
|Figures:
72
Format -
Custom Software Development Market Insights
Global Custom Software Development Market size was valued at USD 33.54 Billion in 2023 and is poised to grow from USD 43.05 Billion in 2024 to USD 212.67 Billion by 2032, growing at a CAGR of 22.1% during the forecast period (2025-2032).
Growing demand for business process automation, rising adoption of data-driven decision-making, need for better cybersecurity and data privacy compliance, and increasing popularity of remote work and digital collaboration are key factors driving demand for custom software development.
The surge in popularity of automation and high emphasis of businesses on streamlining their operations to reduce manual errors are primarily creating new business scope. Increase in popularity of remote work and need for better digital collaboration to enhance work productivity are also slated to uplift the adoption of custom software development solutions and services in the future. Security-focused software solutions incorporating encryption, multi-factor authentication, and threat detection systems are in high demand as cyber threats evolve.
On the contrary, long development timelines, dearth of skilled professionals, complexity of custom software, compatibility issues with existing IT infrastructure, and risk of project failure are forecasted to hamper the global custom software development market growth across the study period and beyond.
How Can AI Alter the Custom Software Development Process?
Artificial intelligence (AI) and automation are transforming the software development lifecycle by enhancing code generation, debugging, and testing processes. AI-powered tools like GitHub Copilot and OpenAI Codex assist developers in writing efficient code, reducing development time. Automated testing and deployment frameworks improve software reliability and scalability. Businesses are integrating AI-driven analytics, chatbots, and machine learning models into custom applications to enhance functionality. The rising adoption of AI in software development is improving productivity and enabling the creation of smarter, more efficient applications.
Can Startups Alter the Trajectory of Custom Software Development Going Forward?
New companies are leveraging artificial intelligence to create novel software offerings around the world. Some startups are providing custom software development solutions and services through a combination of various technologies. Here are some startups that could change the future of software development.
- Resolve AI: Founded just last year in 2024, the company has made a significant name for itself in automating software operations. Resolve AI’s tools autonomously troubleshoot and fix production issues, allowing engineers to focus more on development tasks. Based in Palo Alto, California, United States, the company raised USD 35 million in a seed round back in October 2024. The company intended to use the capital to expand its business scope.
- Rune Technologies: Based in Roslyn, Virginia, United States, the company is focusing on developing software to automate military logistics. The company is known for TyrOS, which autonomously tracks supplies, predicts resupply needs, and integrates with government systems. The startup was founded in 2024 and raised USD 6.2 million in seed funding in February 2025 to scale its product and engineering teams in the future.
Market snapshot - (2025-2032)
Global Market Size
Largest Segment
Large Enterprises
Fastest Growth
SMEs
Growth Rate
22.1% CAGR
Global Custom Software Development Market ($ Bn)
Country Share for North America Region (%)
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Custom Software Development Market Segments Analysis
Which Organizations Lead the Adoption of Custom Software Development?
Large enterprises are forecasted to account for a substantial chunk of the global custom software development market share in the future. Willingness of large enterprises to spend more on automation to gain a competitive advantage is promoting the use of custom software. Availability of vast number of resources and capital to invest is also helping this segment’s high share. The need for custom software compliant with processes of large enterprises are also cementing the dominance of this segment.
Meanwhile, the demand for custom software development in small and medium enterprises (SMEs) is slated to rise at a notable pace over the coming years. High flexibility and scalability offered by custom software development makes it a preferred choice for SMEs around the world. Rapidly increasing number of SMEs and their emphasis on adoption of automation, are also slated to help create new business scope going forward.
Which Deployment is Preferred by Custom software development Companies?
Cloud segment is estimated to account for more than 50% share of the global custom software development industry in the future. High flexibility, affordability, and scalability remain the top factors promoting the adoption of cloud deployment for multiple software development companies. Advancements in cloud computing and increasing willingness to use cloud technologies are helping this segment bolster its dominance across the study period. Adoption of BYOD (bring your own device) trend is also estimated to help promote the use of cloud deployment by organizations.
On the other hand, the demand for on-premises deployment is slated to rise at an impressive CAGR over the coming years. Total ownership, better flexibility, and complete control offered by on-premises custom software is making it a popular choice among organizations focused on data privacy and security. Government and BFSI organizations are more likely to opt for on-premises custom software development in the long run.
Global Custom Software Development Market By Organization Size
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Custom Software Development Market Regional Insights
Will Custom Software Development Demand be High in Asia Pacific?
Rapidly increasing adoption of advanced technologies in organizations coupled with high digitization are making Asia Pacific the fastest-growing regional market for custom software development companies. High emphasis on modernization of legacy software, presence of a robust SME and startup ecosystem, and increasing number of custom software development providers are also slated to promote market growth in the long run.
Custom Software Development Market in China
Boom in e-commerce and digital payment adoption in China is expected to primarily drive the demand for custom software development going forward. Increasing demand for custom software solutions by Chinese companies to stay competitive and improve business scope is also creating new opportunities for market players. Expansion of cross-border e-commerce activities and use of artificial intelligence are also slated to boost the demand for custom software development services in the country.
Custom Software Development Market in India
India is slated to emerge as a highly rewarding country for custom software development providers operating in the Asia Pacific. The presence of multiple IT service providers, booming startup ecosystem, and availability of highly skilled IT engineers are some key factors allowing this country to offer new business opportunities for market players. Moreover, India’s leading position as a major outsourcing hub for other countries is also slated to promote the demand for custom software development through 2032.
Should Custom software development Providers Invest in Europe?
Growing adoption of automation in multiple businesses in the European region is slated to primarily promote the demand for custom software development. Shortage of skilled workforce in this region is causing more organizations to rely on digital solutions to keep their business operational. The surge in adoption of cloud computing is also slated to bolster the demand for custom software development in the European region over the coming years.
Custom Software Development Market in United Kingdom
Increasing adoption of multi-cloud and hybrid cloud environments is slated to make the United Kingdom a highly lucrative country for custom software development providers in Europe. Rising emphasis on improving cybersecurity and growing demand for custom financial software are also expected to boost the demand for custom software development services in the country.
Custom Software Development Market in Germany
Growing demand for automation and use of artificial intelligence in German organizations is forecasted to bolster the adoption of custom software development in the future. High emphasis on leveraging AI to make informed business decisions and promote data-driven decision-making are also slated to favor market growth in Germany. Adoption of Industry 4.0 trends in the manufacturing sector is also expected to boost the deployment of custom software.
What Makes North America a Leader in Custom software development Adoption?
Quick adoption of advanced digital technologies and presence of a developed technological infrastructure allow North America to emerge as a top region for custom software development companies. Growing awareness regarding benefits of custom software among SMEs is also slated to boost revenue generation in this region. Emphasis on organizations on reducing manual errors, improving compliance, and boosting efficiency are also slated to create a new business scope going forward.
Custom Software Development Market in United States
Rapidly increasing use of technologies such as IoT, cloud computing, and AI in the United States is allowing it to emerge as the most lucrative country in North America. The surge in adoption of smart devices and technologies in the country coupled with the presence of leading custom software development companies are also helping this country hold sway over others in the future. Demand for personalized experience in the retail industry is also slated to promote innovation in the custom software development space.
Custom software development Market in Canada
Strong economic growth of Canada allows it to emerge as a key country for custom software development providers. Growing digital transformation, high preference for automation in organizations, support from Canadian government for the tech sector, and proximity to the United States are key factors making this a highly attractive country not just in this region but on a global level as well.
Global Custom Software Development Market By Region
- Largest
- Fastest
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Custom Software Development Market Dynamics
Drivers
High Adoption of Business Process Automation
- Organizations around the world are focusing on automating repetitive tasks to maximize their business scope and streamline operations. Custom-built applications provide tailored automation features, improving efficiency and productivity across industries such as healthcare, finance, and retail. Hence, surging investment in automation is slated to benefit the global custom software development market outlook going forward.
Emphasis on Scalable and Flexible Business Solutions
- Off-the-shelf software often lacks the flexibility to accommodate specific business needs and growth objectives. This is a prime reason why organizations are moving towards custom software that is highly flexible and scalable as per operation expansion of business. Custom-built applications allow businesses to integrate new features, modify functionalities, and adapt to evolving market conditions without relying on rigid, pre-packaged software.
Restraints
Long Development Timelines and Complexity
- Developing custom software from scratch can take several months or even years, depending on complexity and required features. Lengthy development cycles can delay business processes, product launches, and digital transformation initiatives. Complex software projects require extensive planning, coding, and testing, increasing the risk of delays and cost overruns, which in turn are slated to impede revenue generation for companies.
Dearth of Skilled Professionals
- Custom software development requires an extensive team of experienced software developers, UI/UX designers, and cybersecurity experts. Such individuals are quite limited in availability in the market, which has led to higher talent costs. Recruiting and retaining skilled software engineers for custom software development can be challenging, especially for startups and SMBs with limited resources thereby slowing down market growth potential.
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Custom Software Development Market Competitive Landscape
Custom software development providers should focus on integration of advanced technologies in custom software to improve their revenue generation potential in the long run. Creating a digital framework for verification of e-passports is a key opportunity as per this global custom software development market forecast through 2032.
Top Player’s Company Profiles
- Accenture plc
- Brainvire Infotech Inc.
- Capgemini
- Cognizant
- HCL Technologies Limited
- Iflexion
- Infopulse
- Infosys Ltd.
- Magora
- Microsoft
- Tata Consultancy Services Limited
- Thoughtworks, Inc.
- Tietoevry
- Trigent Software, Inc.
- TRooTech Business Solutions
Recent Developments
- In May 2024, Proxet Group Inc., a renowned digital engineering company announced a strategic partnership with Palantir Technologies Inc. This partnership helped Palantir expand its software development options and improve the application scope of artificial intelligence for enterprise uses. Proxet has been working in partnership with leading tech companies such as Microsoft, Amazon Web Services, and Snowflake to expand its business.
- In October 2024, Prominent, a leading custom software development and IT staffing organization, announced the launch of its refreshed website. The new website is testament to Prominent’s commitment to strengthen its online presence and expand its business scope whilst improving relationships with existing clients.
- In June 2024, Writer, a novel full-stack generative AI platform announced the launch of a no-code platform for the custom enterprise AI application development called AI Studio. The company also launched Writer Framework to help companies rapidly build and deploy custom generative AI applications as AI boom picks up pace.
Custom Software Development Key Market Trends
- Adoption of Low-Code and No-Code Development Platforms: Custom software development companies should invest in low-code and no-code development platforms to accelerate software creation while reducing reliance on traditional coding. Non-technical users can build custom applications using drag-and-drop interfaces and pre-built modules through such no code platforms. Focusing on this custom software development market trend can help overcome the issues of high talent costs and dearth of skilled professionals in the future.
- Demand for Cloud-Native and Microservices Architecture: Custom software development providers are expected to shift from traditional monolithic software models to cloud-native and microservices-based architectures to build scalable and resilient solutions. Microservices architecture allows applications to be broken down into smaller, independent services, making software development more flexible and scalable. The surge in popularity of cloud-native technologies like Kubernetes and serverless computing is also expected to offer new opportunities for companies.
Custom Software Development Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, increasing demand for business process automation and preference for scalable business software are slated to primarily drive the demand for custom software development going forward. However, long development timelines & complexity and dearth of skilled professionals are expected to slow down the demand for custom software development in the future. North America is forecasted to emerge as the leading market for custom software development providers owing to high preference for automation in organizations and presence of a developed technological infrastructure. Use of low code and cloud-based technologies for custom software development are slated to present new business scope for companies across the study period.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 33.54 Billion |
| Market size value in 2032 | USD 212.67 Billion |
| Growth Rate | 22.1% |
| Base year | 2024 |
| Forecast period | (2025-2032) |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Custom Software Development Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Custom Software Development Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Custom Software Development Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Custom Software Development Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Custom Software Development Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Custom Software Development Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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