SMB Software Market to Grow by USD 65.7 Billion (2024-2028), Rising Demand for Cloud-Based Applications Boosting Growth, AI Impact on Market Trends - Technavio

NEW YORK, Dec. 18, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape - The global SMB software market size is estimated to grow by USD 65.7 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 7.81% during the forecast period. Increasing demand for cloud-based applications is driving market growth, with a trend towards increasing mergers and acquisitions, partnerships, and collaborations. However, threat from open-source smb software providers poses a challenge. Key market players include Accenture Plc, Acumatica Inc., Alfresco Software Ltd., Cisco Systems Inc., Epicor Software Corp., IFS World Operations AB, Infor Inc., International Business Machines Corp., Microsoft Corp., Newgen Software Technologies Ltd., Open Text Corporation, Oracle Corp., Roper Technologies Inc., Sage Group Plc, SAP SE, SYSPRO Pty. Ltd., TOTVS S.A., Unit4 Group Holding B.V., Workday Inc., and Xero Ltd..

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Market Driver

Vendors in the Small and Medium Business (SMB) software market are implementing strategic moves to enhance their market position. Microsoft Corp. And Cisco Systems Inc. Are notable examples, having acquired Clear Software and ThousandEyes, respectively, in October 2021 and August 2020. Clear Software specializes in integration and business-process solutions, focusing on SAP and Oracle connectivity, while ThousandEyes strengthens Cisco's Internet and cloud intelligence platforms. These acquisitions underscore the competitive landscape, contributing to the growth of the SMB software market during the forecast period. 

The SMB Software Market is witnessing significant trends in accounting software solutions, with QuickBooks leading the charge. Cloud-based services are popular among Microbusinesses and Medium Companies for their flexibility and accessibility. Large enterprises continue to invest in On-Premise Solutions for IT infrastructure stability and process integrity. Digital technologies have streamlined business processes, enhancing customer satisfaction. Cloud-based applications offer real-time, actionable data for Business Management, ERP, CRM, Logistics, and Debt Collection. Cyber security solutions are essential for data protection in the digital age. Remote work requires reliable IT infrastructure availability. On-premise software offers standard cost and actual cost control systems. Accounting Information Systems are vital for SMBs and SMEs, with functional modules including Accounts Payable, Payroll, Accounts Receivable, Trial Balance, and Cost Control Systems. 

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Market Challenges

• In the SMB software market, the proliferation of open-source software providers poses a significant challenge. Free CRM, ERP, and SCM applications, among others, are readily available from vendors like Bitrix24, Flowlu CRM, and HubSpot CRM. Open-source SMB software vendors offer a wide range of tools and applications, enabling businesses to cover most capabilities provided by premium software providers. These software solutions are compatible with various operating systems, including Linux, Mac, Windows, Android, and iOS. Small and medium-sized businesses, particularly those in developing economies, are the primary consumers due to budget constraints. This trend may impact the market share of SMB software vendors during the forecast period.
• The SMB Software Market caters to the needs of small and medium businesses (SMBs) for various software solutions. Two popular options are Accounting software, which includes QuickBooks, and Business Management software, encompassing ERP, CRM, logistics, and debt collection systems. SMBs face challenges in selecting between Cloud-based and On-premise solutions. Large enterprises often prefer On-premise due to IT infrastructure requirements, while Microbusinesses lean towards Cloud-based applications for affordability and flexibility. Cloud-based services offer real-time access to data, enabling remote work and improved customer satisfaction. However, they come with cybersecurity concerns and dependency on internet connectivity. On-premise software ensures process integrity and IT infrastructure availability but requires significant upfront investment and ongoing maintenance. SMBs require functional modules like Accounts Payable, Payroll, Accounts Receivable, and Trial Balance for effective business process management. Standard cost and actual cost systems help in cost control. Accounting Information Systems provide actionable data, enhancing decision-making capabilities. Digital technologies continue to reshape the SMB Software Market, with Cloud-based applications gaining popularity.

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Segment Overview 

This smb software market report extensively covers market segmentation by

1. Deployment 
• 1.1 On premises
• 1.2 Cloud
2. Application 
• 2.1 Media
• 2.2 Telecommunication
• 2.3 Consultants
• 2.4 Law firms
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 South America
• 3.5 Middle East and Africa

1.1 On premises- Small and medium-sized businesses (SMBs) prefer on-premises software solutions for their business management needs, including ERP, CRM, logistics services, and debt collection software. These solutions offer superior system security, allowing businesses to manage their hardware and software on their premises. Regulated industries opt for on-premises software due to data security concerns. Vendors like SAP SE and Oracle Corp provide such solutions. While more expensive due to hardware and capital expenditure, on-premises software offers customization and high data security. The COVID-19 pandemic posed challenges to the on-premises SMB software market in 2020. Nationwide lockdowns and business closures led to a decrease in the use of on-premises software for SCM, hiring, and operations. However, with the lifting of restrictions and effective vaccination measures, SMBs are reviving their operations and investing in software to boost productivity. Despite initial setbacks, the need for improved business processes will drive the growth of the on-premises SMB software market during the forecast period.

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Research Analysis

The SMB Software Market refers to the industry that provides various software solutions to small and medium-sized businesses (SMBs). This market encompasses a range of applications, including accounting software for managing financial transactions and functional modules for specific business processes like accounts payable, payroll, and accounts receivable. Trial balance and cost control systems are essential tools for ensuring accurate financial reporting and maintaining standard costs. SMBs come in all sizes, from microbusinesses to large enterprises, each with unique needs. Digital technologies, such as cloud-based services, have revolutionized the SMB Software Market, offering flexibility, accessibility, and cost savings. Cybersecurity solutions are increasingly important as businesses move online, ensuring customer satisfaction and data protection. Remote work and on-premise software options cater to the diverse work arrangements of SMBs. Business management software, ERP software, and other business process solutions help streamline operations and improve efficiency.

Market Research Overview

The SMB Software Market encompasses a range of accounting software solutions designed for Small and Medium Businesses (SMBs) to manage their financial transactions and business processes. These solutions include application software for accounting, functional modules like Accounts Payable, Payroll, and Accounts Receivable, and Accounting Information Systems. SMBs can choose between Cloud Solution and On-Premise Solution based on their specific needs. SMBs benefit from actionable data provided by these software solutions, enabling them to make informed decisions, improve customer satisfaction, and streamline business processes. Digital technologies, such as Cloud-based services and Cyber security solutions, ensure data security and availability for remote workforces. Cost control systems, with Standard Cost and Actual Costs, help SMBs monitor expenses and optimize resources. Business Management Software, ERP software, CRM software, Logistics service software, and Debt collection software are additional functionalities that cater to various business requirements. IT infrastructure and Cloud-based applications ensure process integrity and IT infrastructure availability. SMBs can select the best solution based on their size, from Microbusinesses to Medium Companies.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Deployment
• On Premises
• Cloud
• Application
• Media
• Telecommunication
• Consultants
• Law Firms
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio