Software market analysis
A software market analysis makes it easier to understand this very important, growing and rapidly changing industry. Check out the MarketHub report today!
What challenges does the software market face?
The IT industry faces challenges including the development of artificial intelligence, the climate crisis, the Internet of Things and the Metaverse, multicloud and cybersecurity, data management, staff shortages and remote work.
According to the definition on the Codecool website, programming consists of "designing, creating, testing and maintaining source code [...]". Even before the pandemic, it was a prestigious occupation. Today, with artificial intelligence, more widespread remote work and wider access to all kinds of courses, the IT industry faces new challenges, and not only a severe shortage of specialists. These challenges are:
Analysing the software market therefore means looking into the future.
How many IT workers is Poland short of?
The IT market in Poland is short of as many as 147,000 workers, and according to Codrilla 27% of the industry companies surveyed want to increase their headcount.
The IT market in Poland is short of workers: as many as 147,000 are missing! According to Codrilla, 27% of the industry companies surveyed want to increase their headcount. In January 2023, as many as 123% more job offers appeared in the sector than in January 2022. On Just Join IT, the number of IT job offers rose by as much as 183% in 2022 compared with 2021. However, the mood is not very optimistic. Demand for programmers, driven by the pandemic lockdown and money from the government's anti-crisis shield, has slowed somewhat. Uncertainty related to the development of artificial intelligence and the stabilisation of the market are bringing both demand and salaries back to realistic levels, although salaries are still rising. Will they stop, and if so, when? A time of uncertainty and change (VUCA) is coming for the IT industry.
| Indicator | Value |
|---|---|
| Shortage of IT workers in Poland | 147,000 |
| Industry companies planning to increase headcount (Codrilla) | 27% |
| Increase in sector job offers, January 2023 vs January 2022 | 123% |
| Increase in IT job offers on Just Join IT, 2022 vs 2021 | 183% |
What were the IT industry trends in 2023?
The software market proved resilient to crises, but the pandemic and access to courses increased the supply of programmers, devaluing the profession, while AI development is both an opportunity and a risk.
The software market analysis indicates that the market is quite resilient to external crises and coped well during the pandemic. This is of course due to the nature of a programmer's job, which can simply be taken home. However, the pandemic and the availability of courses increased not only demand but also supply in sectors such as virtual assistance, copywriting, e-commerce and programming itself. In just three years, the labour market has changed a great deal. Programmers used to be highly qualified staff; today everyone wants to learn to code, and it is much easier. Hence the devaluation of the profession. Specialists are watching the post-pandemic world with curiosity, as well as the development of artificial intelligence, which seems more capable than expected. This is both an opportunity and one of the risk factors.
What are the opportunities and threats for the software market?
Opportunities for the software market include artificial intelligence, multicloud, big data, the Metaverse and Green Coding, while threats include inflation-driven wage pressure and managing distributed teams.
Artificial intelligence
It turns out that AI can do far more than give simple answers pre-assigned to a question. It can even write and correct simple code. This means that a programmer's job will simply become easier. This conclusion comes, for example, from a Modestprogrammer report. According to Businessinsider, salaries in the IT industry are rising and average PLN 11,427 a month. There will be demand for new employees, especially at the stage of "training" AI or testing its still undiscovered capabilities, including in distributed teams.
Managing a distributed team
But inflation-driven wage pressure (junior positions can expect an average raise of 16%) is not the only risk. The dispersion of teams caused by the pandemic and remote work [defined in the Act of 1 December 2022 amending the Labour Code and certain other acts (Journal of Laws of 2023, item 240)] requires new management methods. New tools are needed, such as Asana, which makes it easier to oversee project delivery. But that is not all. Soft skills will also be needed, such as working in an international environment and time management. So will fast data transfer and storage that work from any location. This is where Multicloud comes in.
Multicloud
According to a Gazeta Finansowa report, storing data in the cloud and managing several clouds at once (Multicloud) is becoming increasingly important. It makes it possible to work better and more efficiently from anywhere, even when team members have no direct contact with each other. Companies therefore face the challenge of maintaining network capacity and data security. Cybersecurity is thus a promising area for growth. Other specialists who move easily in virtual reality are also needed. Of the 1,000 IT decision-makers surveyed by IDL, 77% say that the shift to buying digital infrastructure as a service will be very important. The XaaS market is worth USD 904 bn! The "everything as a service" and subscription model is simply convenient for users. We subscribe not only to VoD services, but also to cars, shopping, transport services and even… jewellery. This means huge potential, and also a huge amount of data to process, not only at work.
Blockchain and Big Data
Not only teams but also data are now dispersed. There is no longer a single physical place where data is collected. At the same time, interest in colocation, i.e. server hosting, is growing. This segment of the market will be valued at USD 8.2 bn and is expected to grow by 13.22% in 2023–2030. Challenges related to limited access to land, remote work and huge amounts of data are also multiplying. A great deal has already been written about big data and the demand for specialists in this area. The same goes for the Metaverse.
Metaverse
Social media and the virtual world keep presenting the industry with new challenges. The Metaverse, a network of virtual worlds you can visit by putting on special glasses, shows great potential in marketing and, of course, increases demand for specialists. The Internet of Things (IoT) is a market that is expected to reach USD 342 bn within the next 12 months and grow by 6.4% on the previous year. By 2027, the value of this market is expected to rise to USD 412 bn. Automation and digitalisation of customer service (chatbots, autoresponders) and many other areas are also very visible trends, which increase demand for programmers' services.
| Segment | Value (USD bn) | Growth |
|---|---|---|
| XaaS market ("everything as a service") | 904 | – |
| Colocation (server hosting) | 8.2 | 13.22% in 2023–2030 |
| Internet of Things (IoT), next 12 months | 342 | 6.4% on the previous year |
| Internet of Things (IoT), 2027 | 412 | – |
Courses and training in software basics
Like journalism, programming has become a much more accessible profession. Courses and training are cheaper and programming languages themselves are less complicated. In the past, building a website required knowledge of at least HTML. Today it is much simpler. According to a Zielona Linia report, Poland needs as many as 12 years to make up for the shortage in the IT market. The boom is therefore expected to last until 2030. According to an article in Rzeczpospolita, we are short of about 147,000 IT specialists! Artificial intelligence will not replace them. Why?
So there is no question of AI taking anyone's job. But it will change the software market, especially in the era of the climate crisis.
Green Coding
Shortages in the market are also the result of the industry's greater awareness of environmental protection. Green Coding drives the search for specialists whose work and software will have a smaller carbon footprint. The IT industry generates 1–5% of greenhouse gas emissions. It is time to change this and implement digital solutions that make it easier to reduce waste. And the possibilities do not end there!
What is the outlook for the software market?
The IT boom is over, but demand for specialists remains, salaries are still rising, though more slowly, and artificial intelligence may create new specialisations.
In just three years, the IT industry has changed a great deal. Our analysis of the software market shows that although the boom is over, there is still demand for specialists in this field. In the future, artificial intelligence may even create new specialisations, especially in "training" the algorithm or researching the still undiscovered capabilities of AI. To sum up:
The software market review therefore clearly shows that the IT industry is doing well and promising changes lie ahead.
Author: Katarzyna Pokrywczyńska
Sources:
ERP and CRM software market in Europe
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