The Software Rental Service Market is estimated to be valued at US$ 42.92 Bn in 2023 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Software rental services involve providing access to software applications for a fixed period without transferring the ownership. They help in reducing upfront costs and offers flexibility to use applications based on business needs. Cloud-based delivery model allows accessing software anytime from anywhere using internet connected devices, thereby enhancing productivity and collaboration.
Market key trends:
The major trend spurring the growth of software rental service market is the increasing adoption of cloud-based delivery model. Cloud-based software rental services help in achieving scalability, maintenance, and security of applications without upfront capital expenditure on hardware, servers, and technical staff. It allows paying for only what is used with pay-as-you-go pricing model. This brings savings in IT budgets of organizations and aligns costs with real-time business demands. Moreover, cloud delivers enhanced mobility, collaboration, and remote access to applications, making organizations agile and responsive.
Porter's Analysis
Threat of new entrants: Low capital requirement for software rental service lowers the threat of new entrants. However, established players have strong brand image and customer loyalty.
Bargaining power of buyers: Buyers have high bargaining power due to availability of substitutes and option for monthly/annual subscriptions. This compels services to provide additional benefits.
Bargaining power of suppliers: Software developers have moderate bargaining power due to limited dependence of rental services on a few software. Services can choose from various software options.
Threat of new substitutes: Threat from new substitutes is high with availability of open-source and freemium software. Moreover, outright software purchase is also a substitute.
Competitive rivalry: Intense competition exists among the well-established players due to their strong global presence and economies of scale.
SWOT Analysis
Strength: Wide range of software options, convenient subscription models, and strong brand presence of key players.
Weakness: High customer acquisition and retention cost. Threat from free and open-source variants.
Opportunity: Growth in SMBs and rise in BYOD trend presents an opportunity. Shift towards cloud-based solutions also favors the market.
Threats: Economic slowdowns can decrease business spending. Strong bargaining power of buyers is also a threat.
Key Takeaways
The Global Software Rental Service Market Trend is expected to witness high growth, exhibiting CAGR of 6.0% over the forecast period, due to increasing adoption of cloud-based solutions. North America dominates the market currently due to strong presence of key players and early adoption of cloud technologies among enterprises. Asia Pacific is expected to grow at the fastest rate owing to growing SMB sector and digitization efforts in major countries.
Regional analysis The software rental service market in North America is expected to maintain its dominance during the forecast period. This is attributed to the strong presence of major market players such as Microsoft, Adobe, and Oracle in the region. Asia Pacific market is anticipated to grow at the highest CAGR owing to growing SMB sector and rising IT spending across China, India, Japan and other countries.
Key players operating in the Software Rental Service market are Adobe Inc., Microsoft Corporation, Salesforce.com Inc., Oracle Corporation, Intuit Inc., SAP SE, Autodesk Inc., IBM Corporation, Dropbox Inc., Slack Technologies Inc., Google LLC, Zoom Video Communications Inc., Atlassian Corporation Plc, ServiceNow Inc., HubSpot Inc. The key players are focused on partnerships, acquisitions and new product launches to expand their presence and gain more revenue share.
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