Software - South Korea

South Korea

In 2024, the projected revenue in the Software market in South Korea is estimated to reach €9.33bn.
Among the various segments, Enterprise Software dominates the market with a projected market volume of €3.97bn in 2024.
Looking ahead, the revenue is expected to exhibit an annual growth rate (CAGR 2024-2029) of 5.00%, which would result in a market volume of €11.91bn by 2029.
When compared globally, United States is anticipated to generate the highest revenue of €337.00bn in 2024.
South Korea has emerged as a global leader in software development, with a thriving startup ecosystem and a strong emphasis on innovation and technological advancements.

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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Monnaie

Analyst Opinion

South Korea, a country known for its technological advancements, is a hub for software development. With a population of over 51 million, the country has a high internet penetration rate of 96%, making it an ideal market for software companies.

Customer preferences: South Korean customers are tech-savvy and demand high-quality software products. They prefer software that is user-friendly, reliable, and provides a seamless experience. In recent years, there has been a growing demand for mobile applications, especially in the gaming and entertainment industry. Additionally, there is a preference for software products that are customized to meet local needs and cultural preferences.

Trends in the market: The software market in South Korea is growing at a steady pace, driven by the increasing demand for software products across various industries. The country has a thriving startup ecosystem, with many innovative software companies emerging in recent years. One of the significant trends in the market is the increasing adoption of cloud-based software solutions. Companies are moving away from traditional on-premises software to cloud-based solutions that offer greater flexibility, scalability, and cost-effectiveness.Another trend in the market is the growing importance of artificial intelligence (AI) and machine learning (ML) in software development. Many companies are integrating AI and ML into their software products to enhance customer experience, improve efficiency, and reduce costs. Additionally, there is a growing demand for software products that incorporate blockchain technology, especially in the financial and healthcare sectors.

Local special circumstances: South Korea has a unique business culture that favors local companies over foreign ones. Local companies have a better understanding of the market and cultural nuances, giving them an advantage over foreign companies. Additionally, the South Korean government provides various incentives and support programs to local companies, making it challenging for foreign companies to compete.

Underlying macroeconomic factors: South Korea has a robust economy, with a GDP of over $1.6 trillion. The country has a highly educated workforce and invests heavily in research and development, making it an ideal location for software development. Additionally, the government has implemented various policies to support the growth of the software industry, including tax incentives, funding programs, and regulatory support.In conclusion, the software market in South Korea is growing at a steady pace, driven by the increasing demand for software products across various industries. The country's unique business culture and government support provide local companies with an advantage over foreign ones. The growing adoption of cloud-based solutions, AI, ML, and blockchain technology are some of the significant trends in the market.

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.