Industry Statistics and Trends
Software Development in Europe key trends
Software-as-a-Service (SaaS) applications boost revenue.
Rather than purchasing software upfront and installing it on a computer, SaaS users subscribe to the software. The SaaS model requires no additional setup and can be accessed anywhere, making it attractive.
Investment and innovation fuels European software growth.
Venture capital and fintech demand continue to drive strong revenue. Despite a funding dip in 2023, investment remains above pre-pandemic levels, expanding opportunities for developers.
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Software Development in Europe
Industry Revenue
Total value and annual change from 2012-2030. Includes 5-year outlook.
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Software Development in Europe market size (2020-2025)
Industry revenue has grown at a CAGR of 6.9 % over the past five years, to reach an estimated €490.0bn in 2025.
Trends and Insights
European software thrives on innovation and investment, driving revenue growth
- Fintech companies across Europe have developed new and innovative products and services, requiring input from software developers. Scottish fintech company Aveni secured £11 million in July 2023 to develop a large language model for financial services. According to a report by Dealroom, European startups raised US$63 billion (€58 billion) across over 10,000 funding rounds in 2023, with software making up 37% of this investment. While this represents a 37% slump from 2022, it still marks a significant investment level, surpassing pre-pandemic figures. Dealroom stated that Europe's share of global venture capital investment reached a record 19.5% in 2023, doubling from 2018, suggesting growing global confidence in the European tech sector. This financial boost has allowed fintech companies to allocate more resources towards software development throughout Europe over the past five years, seeking out sophisticated technologies that offer a competitive advantage and ensure compliance with regulatory requirements. The industry has prospered from this, fuelling revenue expansion.
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Software Development in Europe outlook (2025-2030)
Market size is projected to grow over the next five years.
Growing cloud adoption will boost sales, despite regulatory challenges holding AI start-ups back
- Cloud platforms provide the foundation for a wide range of software applications, from enterprise resource planning and customer relationship management to data analytics and machine learning. According to Eurostat, 45.2% of businesses in the EU used cloud computing services in 2023, up 4.2 percentage points from 2021. This indicates that while European businesses are progressively integrating cloud solutions, there’s still substantial room for growth. While European software developers have benefitted from an uptick in sales of cloud-based software solutions, there’s much more revenue to be captured as more businesses realise the strength of cloud-based software.
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Revenue
€490.0bn
Employees
3m
Wages
€XXX.Xbn
European Leaders & Laggards
* CAGR values are for the years 2020-2025.
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Biggest companies in the Software Development in Europe
| Company | Market Share (%)
2025 | Revenue (€m)
2025 | Profit (€m)
2025 | Profit Margin (%)
2025 |
|---|---|---|---|---|
SAP SE | 38,243.0 | 9,290.0 | 24.3 | |
Alphabet Inc | 356,739.0 | 128,382.0 | 36.0 | |
Microsoft Corporation | 253,642.0 | 111,370.0 | 43.9 |
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Software Development in Europe
Products & Services Segmentation
Industry revenue broken down by key product and services lines.
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Top Questions Answered in this Report
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What is the market size of the Software Development industry in Europe in 2025?
The market size of the Software Development industry in Europe is €490.0bn in 2025.
How many businesses are there in the Software Development industry in Europe in 2025?
There are 715k businesses in the Software Development industry in Europe, which has grown at a CAGR of 8.3 % between 2020 and 2025.
Has the Software Development industry in Europe grown or declined over the past 5 years?
The market size of the Software Development industry in Europe has been growing at a CAGR of 6.9 % between 2020 and 2025.
What is the forecast growth of the Software Development industry in Europe over the next 5 years?
Over the next five years, the Software Development industry in Europe is expected to grow.
What does the Software Development industry in Europe include?
Systems software and Application software are part of the Software Development industry in Europe.
Which countries have the most businesses in the Software Development industry in Europe?
The European country with the most businesses in the Software Development industry is France.
How competitive is the Software Development industry in Europe?
The level of competition is high and increasing in the Software Development industry in Europe.
Related Industries
This industry is covered in 37 countries
- Software Development in Greece
- Software Development in Romania
- Software Development in Norway
- Software Development in Italy
- Software Development in the UK
- Software Development in Sweden
- Software Development in Germany
- Software Development in Latvia
- Software Development in Bosnia & Herzegovina
- Software Development in the UK
- Software Development in Germany
- Software Development in Ireland
- Software Development in Austria
- Software Development in France
- Software Development in Lithuania
- Software Development in the Netherlands
- Software Development in Belgium
- Software Development in Cyprus
- Software Development in Estonia
- Software Development in Iceland
- Software Development in Europe
- Software Development in Luxembourg
- Software Development in Russia
- Software Development in Slovakia
- Software Development in Hungary
- Software Development in Denmark
- Software Development in Poland
- Software Development in Malta
- Software Development in Croatia
- Software Development in Slovenia
- Software Development in Spain
- Software Development in Portugal
- Software Development in Serbia
- Software Development in Czechia
- Software Development in Turkey
- Software Development in Ireland
- Software Development in Finland
- Software Development in Bulgaria
Table of Contents
About this industry
Industry definition
Companies in this industry develop and adapt software, which includes writing, modifying and supporting computer code, databases and webpages. Developers also customise software so that it's functional within clients’ information system environment and offer select after-sale services.
Related Terms
CLOUD COMPUTINGSOFTWARE AS A SERVICE (SAAS)FINTECHWhat's included in this industry?
Systems softwareApplication softwareSupport servicesCompanies
SAP SEAlphabet IncMicrosoft CorporationIndustry Code
6201 - Computer programming activities in Europe
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Performance
Key Takeaways
European software thrives on innovation and investment, driving revenue growth
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Revenue Highlights
Trends
- Revenue
- 2025 Revenue Growth
- Revenue Volatility
Employment Highlights
Trends
- Employees
- Employees per Business
- Revenue per Employee
Business Highlights
Trends
- Businesses
- Employees per Business
- Revenue per Business
Profit Highlights
Trends
- Total Profit
- Profit Margin
- Profit per Business
Current Performance
Charts
- Revenue in the Software Development in Europe industry (2012 -2030)
- Employees in the Software Development in Europe industry (2012 -2030)
- Business in the Software Development in Europe industry (2012 -2030)
- Profit in the Software Development in Europe industry (2012 -2030)
Analysis
What's driving current industry performance in the Software Development in Europe industry?
Outlook
Analysis
What's driving the Software Development in Europe industry outlook?
Volatility
Analysis
What influences volatility in the Software Development in Europe industry?
Charts
- Industry Volatility vs. Revenue Growth Matrix
Life Cycle
Analysis
What determines the industry life cycle stage in the Software Development in Europe industry?
Charts
- Industry Life Cycle Matrix
Products and Markets
Highlights
Trends
- Largest Market
- Product Innovation
Key Takeaways
Tariffs will hit companies dependent on US exports. Tariffs directly affect the price of PCs, data centre equipment and cloud components, leading to higher costs for US buyers and reducing the competitiveness of European software developers.
Products and Services
Charts
- Products and Services Segmentation
Analysis
How are the Software Development in Europe industry's products and services performing?
Analysis
What are innovations in the Software Development in Europe industry's products and services?
Major Markets
Charts
- Major Market Segmentation
Analysis
What influences demand in the Software Development in Europe industry?
International Trade
Highlights
- Largest Importer
- Smallest Importer
- Total Imports into Europe
- Largest Exporter
- Smallest Exporter
- Total Exports into Europe
Heat maps
- Industry Concentration of Imports by Country
- Industry Concentration of Exports by Country
Data Tables
Value and annual change (%) included
- Number of Imports and Exports by European Country (2025)
Geographic Breakdown
Business Locations
Heat maps
- Share of Total Industry Revenue by Region (2025)
- Share of Total Industry Enterprises by Region (2025)
- Share of Total Industry Employment by Region (2025)
- Share of Total Industry Wages by Region (2025)
Industry Geographic Breakdown
Data Tables
Values and annual change provided for 37 European countries:
- Revenue (2025)
- IVA (2025)
- Enterprises (2025)
- Employment (2025)
- Exports (2025)
- Imports (2025)
Competitive Forces
Highlights
Trends
- Concentration
- Competition
- Barriers to Entry
- Substitutes
- Buyer Power
- Supplier Power
Key Takeaways
Low concentration is a product of a saturated market. Low market share concentration reflects the fragmented nature of the industry outside of the global software houses.
Supply Chain
Charts
Buyer and supply industries
Companies
Market Share
Charts
- Industry Market Share by Company (2020-2025)
Companies
Data Tables
Top 10 companies by market share:
- Market share (2025)
- Revenue (2025)
- Profit (2025)
- Profit Margin (2025)
Data Tables
- Countries of operation for SAP SE
- Countries of operation for Alphabet Inc
- Countries of operation for Microsoft Corporation
- Countries of operation for Oracle Corporation
- Countries of operation for International Business Machines Corporation
- Countries of operation for Dassault Systèmes SE
- Countries of operation for Capgemini Service SAS
- Countries of operation for Atos SE
- Countries of operation for Amadeus IT Group SA
- Countries of operation for Software AG
External Environment
Highlights
Trends
- Regulation & Policy
- Assistance
Key Takeaways
Data protection laws are of paramount importance. The large amount of data that companies in the industry are privy to means they must ensure tight compliance with the GDPR.
External Drivers
Analysis
What demographic and macroeconomic factors impact the Software Development in Europe industry?
Financial Benchmarks
Highlights
Trends
- Profit Margin
- Average Wage
- Largest Cost
Key Takeaways
Labour costs are high. Software development companies require specialised staff to conduct highly skilled and labour-intensive coding and testing tasks. The majority of workers have advanced qualifications so take home big salaries.
Cost Structure
Charts
- Share of Economy vs. Investment Matrix
-
Industry Cost Structure Benchmarks:
- Marketing
- Depreciation
- Profit
- Purchases
- Wages
- Rent
- Utilities
- Other
Analysis
What trends impact cost in the Software Development in Europe industry?
Key Ratios
Data tables
- IVA/Revenue (2015-2030)
- Imports/Demand (2015-2030)
- Exports/Revenue (2015-2030)
- Revenue per Employee (2015-2030)
- Wages/Revenue (2015-2030)
- Employees per Establishment (2015-2030)
- Average Wage (2015-2030)
Country Benchmarks
European Leaders & Laggards
Data Tables
Top and bottom five countries listed for each:
- Revenue Growth (2025)
- Business Growth (2025)
- Job Growth (2025)
European Country Performance
Data Tables
Rankings available for 37 countries. Statistics ranked include:
- IVA/Revenue (2025)
- Imports/Demand (2025)
- Exports/Revenue (2025)
- Revenue per Employee (2025)
- Wages/Revenue (2025)
- Employees per Establishment (2025)
- Average Wage (2025)
Structural Comparison
Data Tables
Trends in 37 countries benchmarked against trends in Europe
- Concentration
- Competition
- Barriers to Entry
- Buyer Power
- Supplier Power
- Volatility
- Capital Intensity
- Innovation
- Life Cycle
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2015-2030)
- IVA (2015-2030)
- Establishments (2015-2030)
- Enterprises (2015-2030)
- Employment (2015-2030)
- Exports (2015-2030)
- Imports (2015-2030)
- Wages (2015-2030)
Methodology
Where does IBISWorld source its data?
IBISWorld is a world-leading provider of business information, with reports on 5,000+ industries in Australia, New Zealand, North America, Europe and China. Our expert industry analysts start with official, verified and publicly available sources of data to build an accurate picture of each industry.
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and IBISWorld's proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
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