Software - Canada

Canada

In 2024, the revenue in the Software market is estimated to reach US$21.78bn.
It is worth noting that Canada's contribution to this market segment is significant.
Among the various subsegments, Enterprise Software dominates the market with a projected market volume of US$9.22bn in 2024.
Looking ahead, the revenue is expected to exhibit an annual growth rate (CAGR 2024-2029) of 4.42%, resulting in a market volume of US$27.04bn by 2029.
When comparing countries globally, United States is expected to generate the most revenue in this sector, reaching US$363.40bn in 2024.
Canada is experiencing a surge in demand for software development services, driven by its highly skilled workforce and supportive government policies.

Key regions: United States, Canada, Germany, China, Japan

Definition:

In general, software is defined as a set of instructions written as programming code to execute specific tasks on a computing device. The Software market covers a wide range of software products and solutions that are publicly sold by various companies. Most software solutions in this market are designed for professional use, but some can also be suitable for personal use. They can also range from basic productivity tools such as word processors and spreadsheets to complex software solutions such as project management tools, graphic design software, and enterprise resource planning software.

Products in the Software market can be obtained in two ways: as on-premises software that is sold via a transactional license or a subscription and as cloud-based software (software as a service/ SaaS) that is most frequently sold as a subscription.

Structure:

The market contains four markets that are based on the functionality of the software:

Productivity Software refers to application software that supports activities such as producing documents, spreadsheets, drawings, and presentations. This market includes Administrative Software, Collaboration Software, Office Software, Creative Software, and Construction and Design Software.
Enterprise Software refers to all software that supports essential large-scale business activities such as enterprise resource management, customer management, and supply chain activities. This market includes Enterprise Resource Planning Software, Customer Relationship Management Software, Business Intelligence Software, Supply Chain Management Software, Content Management Software, and Other Enterprise Software.
Application Development Software refers to software and tools that help the overall application development process.
System Infrastructure Software refers to software that provides the base framework for operating and managing organizational processes and services on hardware devices.

Additional Information:

The Software market comprises revenue and revenue change as the key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in this market include Microsoft, Adobe, SAP, Oracle, and Salesforce.

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Region

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Currency

Analyst Opinion

Canada is known for its strong economy, highly skilled workforce, and advanced technological infrastructure. The software market in Canada is no exception, and it has been growing steadily in recent years.

Customer preferences: Canadian customers have shown a preference for software that is easy to use, secure, and customizable. They also value software that is compatible with multiple devices and platforms. Canadian businesses are increasingly turning to cloud-based software solutions to improve efficiency and reduce costs.

Trends in the market: The software market in Canada is experiencing growth in a number of areas, including cybersecurity, artificial intelligence, and cloud computing. The demand for cybersecurity software is being driven by the increasing threat of cyber attacks and data breaches. Artificial intelligence is also becoming more prevalent in Canadian businesses, as companies seek to automate processes and improve decision-making. Cloud computing is another area of growth, as businesses look to move away from on-premise solutions and take advantage of the scalability and flexibility of cloud-based software.

Local special circumstances: One of the unique features of the Canadian software market is the dominance of the public sector. The Canadian government is a major purchaser of software, and this has created a strong market for software vendors that specialize in government contracts. Another factor that sets Canada apart is the country's bilingualism. Software vendors that can offer products in both English and French have a significant advantage in the Canadian market.

Underlying macroeconomic factors: The growth of the software market in Canada is being driven by a number of underlying macroeconomic factors. The country's strong economy and highly skilled workforce make it an attractive location for software companies to set up shop. The Canadian government has also been supportive of the technology sector, providing funding and incentives for research and development. Finally, the country's proximity to the United States has made it an ideal location for software companies that want to serve both the Canadian and American markets. In conclusion, the software market in Canada is thriving, driven by customer preferences for easy-to-use, secure, and customizable software. The market is experiencing growth in cybersecurity, artificial intelligence, and cloud computing, and is characterized by a strong public sector and bilingualism. The underlying macroeconomic factors, including the country's strong economy and supportive government, make Canada an attractive location for software companies.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises, except for the Enterprise Software segment, in which consumer (B2C) spending is not considered. Figures are based on the allocation to the country where the money was spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, level of digitization, GDP sector composition, and observed level of software piracy. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.