Software as share of companies’ revenue expected to quadruple worldwide by 2030: Report

Ahram Online , Tuesday 28 Nov 2023

Software and digital technologies are anticipated to contribute 29 percent of companies' revenues worldwide by 2030, a substantial increase from seven percent now, according to a recent report by French information technology services and consulting company Capgemini SE.

Illustrative image of software development.
Illustrative image of software development.


The report, titled "The Art of Software," highlights a significant shift across industries, with organizations redefining themselves as software companies, transitioning away from hardware-focused models.

Presently, 25 percent of businesses already primarily identify as software firms, with an additional 32 percent aiming to make this transition within the next three to five years, as revealed by Capgemini's findings.

Projections indicate substantial financial gains from this software-driven evolution. The telecom sector is expected to witness a 39 percent increase in software-driven revenue by 2030, both automotive and banking and insurance sectors foresee a 32 percent growth, while the life sciences sector could potentially experience a 31 percent revenue increase.

In response to this trend, companies are significantly allocating resources to facilitate this transition. Currently, around 18 percent of research and development budgets are allocated to software initiatives, with firms planning a nine percent boost over the next two years. Notably, more than a third of these investments are aimed at product and service engineering.

To expedite software development, 70 percent of organizations intend to leverage generative AI in assisting with software work over the next year, the report reveals.

These tools are projected to automate 37 percent of coding within three years, potentially saving engineers an average of 43 percent of their time.

However, challenges persist as most firms are still in the experimental phase of software-driven shifts, cautioned Capgemini.

Only 29 percent have commenced scaling their software uses, with a mere five percent having fully adopted such initiatives. The need for interoperability and flexibility across platforms is also emphasized, as less than half of current IT systems meet these standards.

William Rozé, CEO of Capgemini Engineering, emphasized the necessity for a mindset shift within organizations in light of this new era of software-led business.

He remarked: "Organizations require a mindset shift if they are to differentiate, innovate, and remain competitive. Thinking must move away from using digital technologies as an add-on or tool to fix crinkles and smooth edges."

Short link: