Purpose-Built Application Market

Purpose-Built Application Industry Outlook

According to Fact.MR, purpose built application market revenue totaled US$ 140.6 Bn in 2020, with the market expected to balloon over 8X by 2031.

Demand for cloud-based custom built application services will accelerate and enjoy 6.6X growth with an absolute dollar opportunity of US$ 687 Bn by 2031. SaaS-based solutions is the largest contributor to the industry, expected to surge at 21% CAGR owing to the rising trend of pay-as-you-go models.

Key Points Covered in Purpose-Built Application Industry Survey:

• Market Estimates (2016-2031) for Purpose-Built Apps
• Factors Driving and Restraining Market Growth
• Segment-wise Analysis of Industry
• Region-wise Insights on Purpose-Built App Demand
• Competition Mapping and Benchmarking
• Impact of Pandemic on Custom Application Development Market
• Key Winning Strategies of Purpose-Built App Developers

Revenue Analysis of Purpose-Built Apps from 2016 to 2020 Compared to Demand Outlook for 2021 to 2031

As per the purpose built application industry analysis by Fact.MR, a market research and competitive intelligence provider, from 2016 to 2020, sales of custom built software increased at around 18% CAGR, with the U.S., Canada, China, India, Ukraine, and Germany holding high share in the global custom-built application market. 

Growing need for business-specific applications in order to increase efficiency by streamlining processes mainly drives demand for custom web applications.

Web-based custom-built applications and mobile-based custom-built applications are set to enjoy a market valuation of US$ 251.4 Bn and US$ 337.3 Bn by 2031, respectively. Additionally, rise in use of custom-built applications for online retailers and e-stores augments global market growth.

The market for purpose-built applications is forecast to surge at a promising CAGR of little over 21% over the coming 10 years.

How is Growing Interest for SaaS-based Solutions Triggering Demand for Purpose-Built Apps?

Implementation of SaaS-based solutions is becoming more prevalent among all sizes of enterprises that are particularly looking to scale up their business operations, which led the segment to capture a market share of nearly 80% in 2020. Demand for mobile-based custom built applications is driven by rising requirement for dynamic platforms among enterprises across various industry verticals.

Furthermore, enterprises are always looking to minimize long-term costs, and deployment of purpose-built apps leads to cost-effectiveness in the long term. Thereby, adoption of web-based solutions is rising, owing to which, the segment is expected to hold a market share of 21.6% by 2031.

How is Latest Trends in Cloud-based Custom-Built Applications Impacting Deployment of Purpose-Built Apps?

Companies are more worried about maintenance costs and initial implementation of accommodating data on-premise. Also, issues with downtime and staff expenses are additional concerns for organizations.

Shifting of organizations towards digital transformation and use of custom-built applications in e-stores are improving customer experience, and is leading to the deployment of purpose-built applications in cloud services. Global cloud-based services are expected to have a market valuation of US$ 787 Bn by 2031. Demand for on-premise custom-built application services is expected to surge at a CAGR of 22.5% and reach with a market share of 32.4% by 2031.

The opportunity for cloud platforms to make purpose-built applications is evident in most developed and developing countries, as they have progressively developed cloud infrastructure for IT services. Additionally, significant rise in the use of custom-built applications by small & medium enterprises (SMEs) will ultimately lead to improved adoption of cloud services, which will directly drive the market for purpose-built apps.

What are the Issues Faced by Purpose-Built App Developers?

The primary restraint of purpose-built apps is that most developers are providing freemium periods. Through this model, vendors are permitting end users to use the service for a limited period of time, and they discontinue it after the end of the period, leading to loss in company revenue.

Among the end users, use of custom-built applications by large enterprises is expected to decline, losing a market share from 83% in 2020 to 80.5% by 2031.

However, security of data is also a significant restraint for the growth of purpose-built apps as companies believe in securing data through in-house data centers. Another restraining factors are data administration and data location, which needs to be correctly worked out in order to surge the deployment of purpose-built apps in the global market.

Which Region Has High Potential for Sales of Web-based Custom-Built Applications?

North America is a major shareholder in the market accounting for over 38.5% share in 2021. Rising use of custom-built applications for financial, banking, and payment services and latest innovations in custom-built applications will significantly drive growth of the market in the region during the forecast period.

Growth can be attributed to major presence of software vendors and rising demand for high-speed data networks in the region. Services such as custom software development have witnessed high demand, mostly due to the growing need for more business-specific software.

Country-wise Analysis

What is the Scenario for Purpose Built App in Japan?

Japan has been using purpose-built apps across various industry verticals, including BFSI and IT & telecom, holding a market share of 18.9% of the East Asia market in 2021.

Higher adoption of digital platforms and integration with technology-based manufacturing are aiding the Japanese custom-built application market growth through 2031.

How Has Germany Been Utilizing Purpose-Built App Since Years?

Germany has a long history of using purpose-built apps owing to high-scale deployment of CRM software and associated platforms. It is expected that purpose-built app in Germany will account for around 14.2% market share of the over Europe market with a valuation of US$ 22.2 Bn by 2031

Category-wise Insights

Why Does the IT & Telecom Sector Hold Significant Share in the Purpose-Built App Space?

Purpose-built application development offers numerous benefits to companies. Revenue from the IT & telecom sector is projected to rise at a CAGR of 16.8% during the forecast period.

For large IT & telecom companies, deployment of purpose-built application is most vital as it allows tailoring their services through personalized platforms. Customized CRM has been playing an important role in the IT & Telecom sector over the past few years.

In order to save costs, IT & telecom companies have underlined the cost associated with expensive data centers. When uncertainty in on-premise data management occurs, integrated cloud infrastructure services have aided as the basis for database management for many companies.

The IT & telecom sector holds 14.1% market share in 2021 with a valuation of US$ 23.8 Bn for the same year.

Was Demand for Purpose-Built Apps Adversely Affected Due to COVID-19?

The COVID-19 pandemic badly impacted several industries, including the technology sector, where a number of enterprises were being forced to re-visit their policies. In order to make sure sales are being closed, customers are served, and at the same time employees are efficient, implementation of purpose-built CRM applications increased.

Whereas, due to rising number of orders for purpose-built applications, the need for timely support and higher costs for licensing were the foremost constraints for the growth of the market.

The market had a downfall of around 6% Y-o-Y owing to the pandemic effect wherein, market valuation reached US$ 140 Bn, which was estimated to have a valuation of US$ 148 Bn if the pandemic uncertainty was not encountered.

Competitive Landscape

Majority of companies discussed in the report have focused on expansion, investments, acquisitions, delivery, portfolio expansion, and brand development.

Some of the key developments are:

• In 2021, Cognizant partnered with Philips Company to provide a service of purpose-built applications to the healthcare sector. This partnership will allow the healthcare sector to leverage the platform to monitor patients by using advanced analytics for its clinical developments.
• In 2021, IBM acquired Turbonomic, a U.S.-based developer of purpose-built applications. This acquisition will allow IBM to boost the compliance and real-time performance of its applications.
• In 2021, HCL Technologies Limited announced the latest version of Domino, a platform for purpose-built applications. The new version will have low code capability for custom web applications.
• In 2021, Accenture acquired Swedish company Cygni for its various software engineering services. This acquisition will help the company alter its business through innovative technical & customized software solutions.
• In 2021, Cognizant acquired U.S.-based Magnetic Technologies to make purpose-built applications and cloud modernization.
• In 2021, Oracle launched the APEX low code service to simplify the making of purpose-built applications, which enables developers to build cultured data-driven initiative apps at least 38X faster than modern coding.
• In 2020, Infosys acquired Kaleidoscope, a U.S.-based company. This acquisition will strengthen its digital offerings of purpose-built applications in the medical, consumer, and industrial markets.
• In 2020, Appian announced a partnership with Pyze. This partnership will provide application business insights with low code analytics for mobile as well as desktop applications.
• In 2018, Microsoft acquired purpose-built application developer GitHub. Software developers will continue to be able to use the tools & operating systems and programming languages of their choice for their assignments, and will still be able to array their code to any cloud, any operating system, and any device.

Similarly, recent developments by top providers of custom-built applications have been tracked by the team at Fact.MR, which are available in the full report.

Purpose-Built App Industry Report Scope

Attribute	Details
Market Size Value in 2021	US$ 169 Bn
Industry CAGR (2021 to 2031)	21%
Top 5 Developers’ Market Share	5% to 8%
Forecast Period	2021-2031
Historical Data Available for	2016-2020
Market Analysis	US$ Bn for Value
Key Regions Covered	North America Latin America Europe East Asia South Asia Oceania MEA
Key Countries Covered	United States Canada Mexico Brazil Germany France U.K. Italy Spain Russia China Japan Indonesia India South Africa
Key Market Segments Covered	Solution Deployment Industry Vertical Enterprise Size Region
Key Companies Profiled	Cognizant IBM HCL Technologies Limited Accenture Infosys Oracle Microsoft Appian Zoho Corporation Pvt. Ltd. Pegasystems Inc. Capgemini TechFabric LLC
Other Companies Analysed	Chetu Kellontech Kanda Software Dotlogics Intellectsoft Unified Infotech
Pricing	Available upon Request

Segments Covered in Purpose-Built App Industry Research

• By Solution

  • SaaS-based Applications
    • Mobile Applications
    • Desktop Applications
  • Web-based Applications

• By Deployment

  • Cloud-based Services
  • On-premise Services

• By Industry Vertical

  • BFSI
  • IT & Telecom
  • Automotive
  • Logistics & Transportation
  • Energy & Power
  • Oil & gas
  • Retail
  • Travel & Hospitality
  • Chemicals & Petrochemicals
  • Academics & Research
  • Entertainment Industry
  • Metal & Mining
  • Food & Beverages
  • Aerospace & Defence
  • Electronics & Semiconductors
  • Others

• By Enterprise Size

  • Small & Medium Enterprises
  • Large Enterprises