Nasscom expects Indian software market to hit $30bn by 2025

A recent report by software industry body Nasscom and market research firm Unearth Insight has revealed that India's software products sales are likely to touch the $30 Billion mark by 2025.

Domestic companies are expanding their global footprint and newbies are increasingly making their presence felt in the software product market. Several software products that include customer relationship management (CRM), enterprise resource planning (ERP) tools, or human capital management (HCM) software are flooding the market with renewed vigor.

Domestic enterprises like Ramco Systems have bestowed the market with new licensed software products while global giants like Infosys have infused into the market upgraded payroll management and core banking products.

The software products market, according to the report, is estimated to clock $13.3 billion in annual revenue for the FY22 that ended recently, after logging a CAGR of over 10% in the previous three financial years.

The global market share for domestic software-as-a-service (SaaS) companies has also doubled during the same period. Nearly 40-50% of the overall spending on software products in the fiscal year 2021 had come from startups and new-age firms (with 100-1,000 employees).

The demand arises mainly from customer firms that are replacing their legacy systems and cutting down on human interventions with SaaS solutions across finance, logistics, and HR. Software products are being increasingly employed in sales forecasts and treasury management by using deep tech. Nasscom estimates 40-60% penetration of deep tech in overall software products by 2030. Trends in machine learning (ML) and artificial intelligence (AI) are evident.

Global players and small and medium businesses (SMBs) are choosing Indian products for customisation or transaction-based pricing. This offers customers the flexibility to buy and gradually scale solutions across geographies, according to the report.

Almost all the products in the market today are cloud-ready. This makes them affordable in terms of storage, while tech companies roll out product updates through the cloud. As much as 80-90% of global enterprise buyers are looking for cloud-based solutions that enable scaling and ease of deployment, according to the report.