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The European Market Potential for Software Development in 2022

Germany has Europe’s largest single software market, representing around half of the whole European market in terms of value. In an industry characterized by a strong Mittelstand of small and medium-sized businesses, change is expected. 

As Germany begins on a far-reaching program of digitization that promises to alter the economy, growing business growth of smart datasets and cloud services is fueling domestic software industry growth.

The industry for custom software development in Europe is expanding. Because of a shortage of software developers, companies have begun outsourcing their software development to other software development companies in Europe. Outsourcing will assist these companies to continue focusing on their primary business also while saving costs.

What is Software Development in the European Market?

Market participants create and modify software that includes writing, changing, and maintaining computer code, datasets, and websites. Information technology consulting activities and the management of data processing facilities for third-party companies are not included in the market.

What Are The Main Software Types?

While the world is constantly changing, technology companies cannot afford to overlook three critical software types. The way IT leaders apply these trends in their organizations will have a direct impact on how productive and happy their developers are.

  • A computer’s basic functions are controlled by the system software, which also enables applications to run.
  • Enables end-users to carry out their duties;
  • Allows for the creation of new software through the use of programming.

What Makes the European Market for Software Development Services So Appealing to Service Providers?

Offshoring vs. Nearshoring

The “domestic outsourcing” trend is common in Europe, where companies seek to outsource services to suppliers in their own country. Because of the vicinity, language, cultural similarity, and short time difference, companies choose to outsource to nearshore areas. 

Software development projects can be extensive, complicated, and important to the client’s long-term success. As a result, it is critical that the customer and developer maintain open lines of communication.

Western and Northern European nations have long been the primary markets for software development. Croatia, Hungary, and Romania are among the most attractive nearshoring destinations for enterprises in these countries. 

As EU members, these nations not only provide the traditional nearshoring advantages but they are also covered by the same European regulations as the purchasing countries when it comes to agreements and payments.

Focus on Main Business Tasks

The fact that European end-user companies can avoid having to acquire in-house talent by contracting software development services is a big benefit. It is difficult for most European end-user organizations to develop software because they lack the necessary skills, expertise, resources, and security measures. 

Outsourcing allows businesses to concentrate on their core business while also allowing them to call on the services of expert developers as and when they see fit.

This is especially crucial in the wake of the COVID-19 crisis’s comeback. In order for companies to carry with their primary functions, which might also already entail additional work from colleagues who were dismissed or suspended, they require the staff they have retained. Due to the limited budget for new employees, outsourcing is a viable alternative.

What Developments Are Presenting Chances for Software Development Services in Europe?

Software Development and the COVID-19 Issue

Businesses around the world have been affected by the COVID-19 pandemic, which has hit outsourcing providers hard. Non-essential activities have been stopped, outsourcing tasks have been brought back in-house, or businesses have gone out of business. 

If you’re lucky, the crisis may even provide you with an opportunity. In a previous CBI seminar, 60% of participants (most of whom were from developing countries) said that the crisis had a negative impact on their business; however, a promising 10% said that the crisis had a positive impact on their business.

Automated Processes and Digital Transformation

Digital technology (often referred to as DT or DX) is the process of resolving issues through the application of rapidly evolving digital technology. Existing digital processes are changed and upgraded to keep pace with changing needs and opportunities.

Software Development’s Impact in Europe

The Digital Economy

As the global economy becomes increasingly competitive, it has become essential to have access to digital inventions and economies. Amidst the fourth industrial revolution, the EU has been able to take control of digital tools and software to propel itself forward. Both the corporate and public sectors can benefit from software in Europe.

Data usage in Europe is expected to increase by a factor of 10 between 2014 and 2020 — from 4.4 billion gigabytes to 46 trillion. Every year, Europe’s digital cosmos doubles in size. As the essential enabler for interpreting data and analyzing it, the software can give users contextual insights and help them drive things more efficiently in a wide range of industries.

Employment Generation in Two Ways

In Europe, high-paying jobs are created by the software industry. This industry employs more than 8.9 million individuals each year, as well as those who assist the business. It’s more than the entire population of Ireland and about 5.3 percent of EU employment.

2.5 million people work directly in the software industry, whereas 8.5 million positions have been generated for skilled professionals such as Altamira US LLC attorneys and accountants. With an average income of €45,333, the software industry levels of service jobs. One might expect to make 80% more than they would in the EU’s service industry, which pays only 35% more than regular employment.