US Custom Software Development Market Size Likely to Reach at a CAGR of 15.2% By 2033

The CMI Team’s most recent market research predicts that from 2024 to 2033, the US Custom Software Development Market will grow at a CAGR of 15.2%. In 2024, the market size is projected to reach a valuation of USD 15,189.4 Million. By 2033, the valuation is anticipated to reach USD 54,276.5 Million.

US Custom Software Development Market: Growth Factors and Dynamics

• Business Demand for Customization: Companies require customized solutions to meet diverse operational needs, and this is an emerging demand for custom software. Off-the-shelf products usually are not tailored to the particular requirements of businesses, leading companies to spend money on bespoke development as such products do not provide firms with better efficiency and productivity.

• Technological Advancements: Rapid advancement of technologies such as artificial intelligence, machine learning, and cloud computing enables the development of more sophisticated and bespoke software solutions. All of these technologies assist in the development of functionalities and processes, aid the application of data-driven decision-making processes, and fuel the growth of the market.

• Digital Transformation Initiatives: Whenever digital transformation is an ongoing process, the need for customized software increases because it makes the incorporation of new technologies and processes easy. The priority attaches to custom solutions as a means of modernizing legacy systems and ensuring more seamless user experiences concerning highly competitive market demands and infrastructures.

• Competitive Landscape: The market is very competitive with the sheer presence of established firms, as well as emerging new startups. Companies differentiate by innovative solutions, specialists, and strong client relationships which creates a dynamic environment to collaborate and partner.

• Outsourcing Trends: Many U.S. companies are outsourcing custom software development to utilize the talent pool found globally and to save costs. It has led to increased competition and innovation in the industry as outsourcing firms vie to deliver quality solutions for clients.

• Regulatory Compliance: Industry-specific rules and regulations would form the backbone of regulatory compliance, such as compliance with the healthcare industry’s HIPAA and GDPR-related regulations about data protection. This situation will influence design, development processes, and market dynamics.

US Custom Software Development Market: Partnership and Acquisitions

• In 2023, Replit partnered with Google Cloud to integrate Google’s infrastructure, services, and AI models into Replit’s Ghostwriter AI tool. In return, Google Cloud and Workspace developers gain access to Replit’s collaborative coding platform. This collaboration aims to accelerate generative AI application development, supporting Replit’s mission to empower 1 billion software creators while emphasizing Google Cloud’s commitment to an open generative AI ecosystem.

• In 2023, Infopulse unveiled PACE Suite 6.1, a streamlined solution for application packaging management. This update simplifies scripting complexities, improves installation success rates, and ensures a uniform deployment process, aiming to enhance efficiency and user experience in software deployment workflows.

• In 2022, Capgemini partnered with Panasonic Automotive Systems Company of America to develop a new data ecosystem. Leveraging Capgemini’s proficiency in data migration and automotive connectivity, the collaboration facilitated Panasonic’s achievement of project objectives, highlighting Capgemini’s capability in client-focused solution delivery.

Report Scope

US Custom Software Development Market: COVID-19 Analysis

The COVID-19 pandemic has significantly impacted the US Custom Software Development Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

Positive Impact Covid-19

• Increased Demand for Digital Solutions: The pandemic of unprecedented ratio invested businesses of different industries in developing customized software that facilitates remote work, digital transactions, and virtual communication. Special solutions for the healthcare and e-commerce sectors began to show an ever-increasing demand.

• Positive Impact on Automation: Companies started embracing automation and AI-driven custom software that would perform operations with minimal human interaction, resulting in increased demand for process automation solutions.

• Remote Working: With the adoption of remote working, there was a huge demand for custom collaboration and workflow software, hence there is significant growth in the personalized remote communication platforms.

Negative Impact Covid-19

• Economic Uncertainty: Budget concerns and uncertainty made some firms delay or give up the ongoing development of some custom software products mainly for non-essential industries putting many such development firms off the pace.

• Supply Chain Disruptions: International disruptions in the supply chain resulted in delayed delivery of custom software projects. Projects that have a global coordination requirement and require specialized tools fall into this category.

• Increased Competition: The surge in demand attracted smaller developers, intensifying competition. Larger firms faced challenges in differentiating themselves and maintaining market share amidst new entrants.

• Current Market: The U.S. custom software development market is quite stable due to continuous and widespread digital transformation in automation and implementation of industry-specific tailored solutions across industries. The competition remains high since developers are innovating and focusing on niche offerings, and businesses have started project resumes that were pending during the pandemic and are embracing hybrid work solutions.

List of the prominent players in the US Custom Software Development Market:

• Accenture
• IBM
• Capgemini
• Cognizant
• Infosys
• Tata Consultancy Services (TCS)
• HCL Technologies
• Wipro
• DXC Technology
• Tech Mahindra
• EPAM Systems
• LTI (Larsen & Toubro Infotech)
• Atos
• CGI
• Virtusa
• Others

The US Custom Software Development Market is segmented as follows:

By Type

• Web-based Solutions
• Mobile App
• Enterprise Software
• Others

By Deployment Model

• On-premises
• Cloud-based

By Organization Size

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

By End-User Industry

• Healthcare
• BFSI (Banking, Financial Services, and Insurance)
• Retail
• Manufacturing
• Government
• Others