Bespoke Software Development Total Addressable Market (TAM) in the UK

The global software development market was worth $472 billion in 2019 while the bespoke or also called the custom software or tailor-made software development segment is estimated to have generated a revenue of $ billion globally. 

About this report: From our market research of the bespoke (custom software) development globally and in the UK, you will be able to understand the current size, growth and expected revenue value of this industry. You will also be able to know your total addressable market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM) in the United Kingdom.

WHAT IS BESPOKE SOFTWARE?

Bespoke software is also called “custom software or tailored software”. It is a software solution created for a specific user. Much like a bespoke suit, these software solutions are made and tailored entirely to exact specifications.

A bespoke software solution is designed to users’ precise needs and as such will meet all of their business requirements.These bespoke solutions are even be developed to fit into your current ways of working, so you needn’t change how you work in order to employ the system.

OVERVIEW OF THE CUSTOM SOFTWARE DEVELOPMENT MARKET

The global software development market was worth $472 billion in 2019 while the bespoke or the custom software development segment is estimated to have generated a revenue of $xxx billion globally. The bespoke software is expected to grow x.x% year-over-year.

In the UK, bespoke software development amounted to approximately $ billion in 2019. Bespoke software products are increasing in popularity in the UK. Accordingly, more UK-based companies are beginning to hire companies for proper enterprise software development services and creating products that are designed exclusively for their in-house needs and requirements. Some key companies in the bespoke industry in the UK are DCSL Software, AppDrawn Software Development, Black Pepper Software, and GoodCore Software.

We have summarised our findings in the graphs and charts below. Details of our calculation, estimation, assumptions, statistics used to derive the figures, TAM analysis, and other industry trends can be found in the “Findings” section.

Bespoke or custom software total addressable market, SAM, and SOM values assuming 100% penetration of the target audience in the UK.

FINDINGS

Global Software development market size, growth and projected trend

The global market size of the software development amounted to $456.06 billion in 2018 and expected to reach $507.23 billion by 2021, an average 3.61% CAGR. The United States accounts for 43.23% of the total market with a revenue of $197.20 billion in 2018.

[Overall global software development market size]

  • 2018: $456.06 billion
  • 2019: $456.06 billion * 1.0361 = $472.52 billion
  • 2020: $472.52 billion * 1.0361 = $489.58 billion
  • 2021: $507.23 billion
  • 2022: $507.23 billion * 1.0361 = $525.54 billion
  • 2023: $525.54 billion * 1.0361 = $544.51 billion
  • 2024: $544.51 billion * 1.0361 = $564.17 billion

Global Bespoke (custom software or tailored software) development market size, growth and projected trend

(Calculations and statistic sources are provided in the report)

Estimated global custom (bespoke) software development market size in 2019

(Calculations and statistic sources are provided in the report)

According to the Technavio market report, the custom software development market by itself will grow annually by 6.79% until 2024.

[Bespoke software development global market size]

  • 2019: $ billion
  • 2020: $ billion
  • 2021: $ billion
  • 2022: $ billion
  • 2023: $ billion
  • 2024: $ billion
Global software and bespoke or custom software market value

Scope of these services largely include software development from scratch, integration with currently running projects, shift from a legacy system toward a new platform, providing of maintenance services, designing of IT infrastructure, and running of different tests to ensure product quality. 

Key players operating in the global custom software development services market are Fingent Corporation, Elinext Group, Flatworld Solutions Pvt. Ltd., Kanda Software, DEVTECHNOSYS, NIX Solutions Ltd., SPEC INDIA, TatvaSoft, Trigent Software, Inc., and Oxagile.

Bespoke Software Development Market in the United Kingdom

According to reports, Bespoke software products are increasing in popularity in the UK. Accordingly, “Off-the-shelf software products have been around for quite some time, and a wide range of organisations are currently resorting to them on a regular basis. However, thanks to the advancements that have been made in this tech sector over the years, custom options are now more accessible. Bespoke software tools have become the preferred choice here. Considering each company has its own particularities and specific processes, having their demands fully covered by a generally designed software product isn’t always possible, so an investment in custom services can be a wise choice to make.”

Additionally, more UK-based companies are beginning to hire companies for proper enterprise software development services and creating products that are designed exclusively for their in-house needs and requirements. Below are strong advantages that are determining organisations to choose the tailored-made alternative instead of the standard off the shelf option.

  • Features and characteristics – custom software can contain solely the characteristics a said company demands, nothing more and nothing less. This will not only ensure proper optimisation and simple integration but a reduced learning time and usability efficiency. 
  • Control – changes can be implemented over time. When business demands increase or change, bespoke software can be further customised to suit new in-house needs. Companies have a better control of their technology this way. 
  • Costs are kept to minimum – organisations aren’t obligated to pay for features that they don’t need. A bespoke software product can often be the more affordable alternative. Costs of repetitive tasks can be minimised as well through efficient automation 
  • Minimised disruptions – errors are less likely to occur when customisation is ensured. Software developers work on creating an appropriate format, one that minimises downtime and service interruptions. 
  • Embracing brand identity – through bespoke options, enterprises can embrace brand identity and white labelling opportunities. 

Estimated market size in the United Kingdom

To analyze the current figures of bespoke software development in the UK, we looked at the top software development companies operating in the country and determined their market shares related to custom or bespoke software. We took the average and applied it to the UK’s overall figure.

Below are the top 20 companies and the percentage denotes the revenue or service share of the custom software development generated by the company.

(Calculations and statistic sources are provided in the report)

Estimated market size of the bespoke software development in the UK

(Calculations and statistic sources are provided in the report)

Average cost of a custom software development in the UK

(Calculations and statistic sources are provided in the report)

If the industry is growing at x.x% year-over-year, then its projected market size in the country is as per below.

[Year-over-year projected market size in the UK]

  • 2019: $ billion
  • 2020: $ billion
  • 2021: $ billion
  • 2022: $ billion
  • 2023: $ billion
  • 2024: $ billion
UK bespoke software development market value

Bespoke Software Development Total Addressable Market (TAM)

Custom software development is usually performed by in-house development teams or outsourced to a third-party. The same processes and methodologies apply to custom software development as other types of software development. A custom project would move through the familiar steps of requirements gathering, code construction, testing and deployment and apply the same methodologies, like Agile, DevOps  or Rapid Application Development, as any other software project.

To determine the total addressable market of the bespoke software, we have to define who the possible target audience that could utilize these software.

As of 2019, there are a total of X.X million businesses in the United Kingdom–X.XX million businesses were small (0 to 49 employees), XXK businesses were medium-sized (50 to 249 employees), and XK businesses were large (250 or more employees).

Number of businesses that have employees 

(Calculations and statistic sources are provided in the report)

According to the latest survey published by UK’s Office of the National Statistics (ONS), of businesses with 10 employees or more, 82% had a website, almost double the proportion of businesses with fewer than 10 employees, at 42%.

Number of businesses (10+ employees) with online presence

(Calculations and statistic sources are provided in the report)

Number of businesses (<10 employees) with online presence

(Calculations and statistic sources are provided in the report)

Total number of businesses with online presence

(Calculations and statistic sources are provided in the report)

While we have determined the possible number of companies that could utilize bespoke software, the value of the TAM depends fully on the software company’s business model and pricing. Here’s how an expert explained the variable factors of determining the cost. Below is the exact quote from the article of what impacts the cost of custom software

1. Software Size: The more screens/pages you have, the more work that needs to be done to build your application, and the more expensive it will be to deliver. Small applications range from 10-25 screens, medium size is in the realm of 25-40 and a large size is anything more than 40.

2. Software Complexity: Complicated logic means more time coding and testing.  If your custom software application performs a lot of heavy analysis, scoring or number crunching, or if your “secret code” has a lot of nuances and permutations, your application probably has some complexity to it that warrants special attention.

3. Creative Design: Creative design in custom software development is where you get to choose different fonts and color palettes among others. Much like when you are designing and decorating a house, the more extravagant your design needs and wants, the more expensive your costs tend to be.

4. Integration With Other Systems: Integrating with external software introduces a lot of unknown variables into the equation. Sometimes the integrations are effortless and sometimes they are extremely difficult. Typical integrations like payment providers such as PayPal or Authorize.Net are extremely easy to integrate with.  The same goes for credit check services from Equifax or Experian.

5. Migration of Existing Data: If you have data in an existing system that needs to go into your new application, assuming it is more than you can feasibly type in by hand, then you will need migration. Migration is nothing more than custom scripts that take data out of your old system, dust it off and reshape it so it can fit into your new system.

(Calculations and statistic sources are provided in the report)

To roughly estimate the TAM value of the bespoke software development in the UK, we will integrate the above average cost and assume that this cost is applicable per target audience.

Estimated TAM value in the UK assuming 100% penetration of the target audience

(Calculations and statistic sources are provided in the report)

Serviceable Available Market (SAM)

According to a survey conducted among decision-makers from various industries, more and more companies are deciding to invest in custom software applications. Below are several industries, which show a bigger interest in implementing such software, as they find the solution indispensable.

Industries and number of companies that are readily available market for bespoke software development in the UK:

1. Recruitment: Nowadays, most recruitment companies rely on digital tools, which allows them to achieve a wider reach of audience and improve communication with candidates. Automating their administrative tasks helps them to improve their hire quality and reduce the amount of time it takes to identify and hire the perfect employee. There are currently XX thousand recruitment agencies registered as trading in the UK. 

2. Hospitality: Bespoke software is especially popular in the hospitality industry. Running a hotel or an estate agency without a software solution which automates and thus supports most business processes is extremely difficult, if not impossible. Most of the interactions with customers take place online, which is why having a web-based platform is a necessity. Currently, there are XXX thousand businesses operating in the industry in the UK, according to the latest statistic from ONS.

3. Manufacturing

No matter the product, manufacturing it on a large scale means there is a need to implement bespoke software. With globalisation, businesses need to reduce the time it takes to ship orders, generate and prioritise jobs, and manage their production in order to improve the customer experience and thus gain the competitive advantage. According to ONS data, there are about XXX thousand companies of all sizes operating in this industry.

 4. Healthcare

Working in the healthcare industry goes far beyond treating patients and writing prescriptions. For a medical centre to prosper, a software solution enabling them to control their finances and provide an excellent customer experience is inevitable. Currently there are XXX thousand companies registered under the healthcare sector in the UK.

Estimated SAM value in the UK assuming 100% penetration of the target audience

(Calculations and statistic sources are provided in the report)

Serviceable Obtainable Market (SOM)

(Calculations and statistic sources are provided in the report)

Total companies ready to innovate

(Calculations and statistic sources are provided in the report)

Estimated SOM value in the UK assuming 100% penetration of the target audience

(Calculations and statistic sources are provided in the report)

The obtained values for TAM, SAM, and SOM could turn into revenues assuming a company has fully penetrated the possible target audience. 

TOP BESPOKE SOFTWARE DEVELOPMENT COMPANY IN THE UK

1. DCSL Software

  • Founded: 1994
  • Headquarters: 50-58 Victoria Rd., Farnborough, Hampshire, GU14 7PG, United Kingdom
  • Company size: 50 – 249 employees
  • Turnover: Estimated revenue between $12 to $35 million)
  • Services: Custom Software Development (50%), Web Development (30%), Mobile App Development (10%), and Enterprise App Modernization (10%)
  • Client focus: 60% on Midmarket ($10M – $1B), 25% on Enterprise (>$1B), and 15% on Small business (<$10M)

2. AppDrawn Software Development

  • Founded: 1999
  • Headquarters: 69-71 Clarendon Rd., Watford, Hertfordshire, WD17 1DS, United Kingdom
  • Company size: 10 – 49 employees
  • Turnover: Estimated revenue is $2 million
  • Services: Custom Software Development (50%), Mobile App Development (30%), Web Development (20%)
  • Client focus: 60% on Small business (<$10M) and 40% on Midmarket ($10M – $1B) 

(Additional 7 companies–top 3 to 10–are provided in the report)

SOURCES AND REFERENCES

(All source and references are included in the report)

Scope included in the report:

  • WHAT IS BESPOKE SOFTWARE?
  • OVERVIEW OF THE CUSTOM SOFTWARE DEVELOPMENT MARKET
  • Global Bespoke (custom software or tailored software) development market size, growth and projected trend
  • Estimated global custom (bespoke) software development market size in 2019
  • Bespoke Software Development Market in the United Kingdom
  • Estimated market size in the United Kingdom
  • The average cost of a custom software development in the UK
  • Bespoke Software Total Addressable Market (TAM) in the United Kingdom
  • Bespoke Software Serviceable Addressable Market (SAM) in the United Kingdom
  • Bespoke Software Serviceable Obtainable Market (SOM) in the United Kingdom
  • TOP BESPOKE SOFTWARE DEVELOPMENT COMPANY IN THE UK

To get a copy of the full report, order below.

Bespoke Software Development Market Analysis in the United Kingdom (UK)

Scope included in the report: - WHAT IS BESPOKE SOFTWARE? - OVERVIEW OF THE CUSTOM SOFTWARE DEVELOPMENT MARKET - Global Bespoke (custom software or tailored software) development market size, growth and projected trend - Estimated global custom (bespoke) software development market size in 2019 - Bespoke Software Development Market in the United Kingdom - Estimated market size in the United Kingdom - The average cost of a custom software development in the UK - Bespoke Software Total Addressable Market (TAM) in the United Kingdom - Bespoke Software Serviceable Addressable Market (SAM) in the United Kingdom - Bespoke Software Serviceable Obtainable Market (SOM) in the United Kingdom - TOP BESPOKE SOFTWARE DEVELOPMENT COMPANY IN THE UK

$7.95

At Mhojhos Research, we deliver outstanding market report results across many industries. Market research is key to a new business becoming a profitable entity. It anticipates and minimizes risk, identifies potential customers and helps ensure success.

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