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Software Development in Germany - Market Research Report (2015-2030)

Ashkan Salim Ashkan Salim Frankfurt, Germany Last Updated: February 2025 WZ J62.01DE

Revenue

€94.6bn

2025

€94.6bn

Past 5-Year Growth

Profit

€X.Xbn

Employees

532k

Businesses

50,010

Wages

€XX.Xbn

Software Development in Germany industry analysis

The programming industry in Germany has undergone considerable upheaval in recent years, mainly due to the transition to cloud computing solutions. This shift is illustrated by the sales performance of companies such as SAP, which aligned their strategy with cloud-based products at an early stage. While traditional software licence sales have declined, cloud solutions have seen significant growth. Such technologies enable companies to operate more flexibly by allowing them to utilise computing resources and software applications in a scalable manner. Smaller programming service providers are increasingly focusing on the creation of specialised products such as apps and games in order to hold their own in the highly competitive market. Industry revenue increased by an average of 2.2% per year between 2020 and 2025.In 2025, turnover is expected to increase by 0.3% to 94.6 billion euros compared to the previous year. The industry is currently benefiting from a sustained boom in the app market, which offers growth opportunities for smaller companies in particular. German companies such as Trade Republic and Ada Health have gained global significance thanks to innovative app developments. At the same time, the use of AI-supported platforms such as OpenAI Codex to increase efficiency in software development is on the rise. These tools allow developers to focus on strategic and creative tasks by automating repetitive coding tasks. However, with the increased use of AI, ethical and data protection issues are also coming to the fore, forcing companies to design their systems transparently and responsibly. The industry's profit margin has fallen since 2020. The main reason for this was the increase in the number of market participants during this period, which intensified price competition among industry players.The sector's turnover is expected to grow between 2025 and 2030. Turnover is expected to increase by an average of 1.8% per year to 103.4 billion euros by 2030. In the future, demand for advanced cloud and security solutions is expected to increase further. Growth areas such as RegTech and IoT security offer immense opportunities through specialised software solutions. Blockchain technology also represents a significant future field, but requires further progress to overcome existing scaling problems. The ongoing shortage of skilled labour remains one of the biggest challenges facing the industry. Companies must increasingly rely on lateral entrants and international specialists to meet their needs. Innovative approaches and close European partnerships will be key to ensuring competitiveness and operating successfully in a dynamic market environment.

Trends and Insights

  • The industry is suffering from a chronic shortage of skilled labour, which means that companies are unable to fill their vacancies. In view of the increasing level of digitalisation and the growing number of market participants, the shortage of skilled workers is likely to worsen further.
  • The share of sales generated with technical software is growing steadily due to the increasing need for digitalisation among companies and public institutions.
  • The two southern German states of Bavaria and Baden-Württemberg are home to most of the companies in the industry. The programming service providers in the Süd region benefit above all from their proximity to industrial companies.
  • Programmers are facing strong competition from companies abroad. Many international corporations are withdrawing development offices from countries with higher labour costs and setting up studios in countries with lower labour costs.

Access hundreds of data points and trends

  • Market estimates from 2015-2030
  • Critical performance data and rankings
  • Detailed analysis of competitive forces and the external environment
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Industry Statistics and Trends

Market size and recent performance (2015-2030)

Industry revenue has grown at a CAGR of 2.2 % over the past five years, to reach an estimated €94.6bn in 2025.

Trends and Insights

Programming service providers that focus on cloud-based products benefit from the high demand

  • In recent years, the sales model of software manufacturers has changed significantly. Licensing, which was the predominant sales model for a long time, is increasingly being replaced by cloud computing.
  • Additional trends and insights available with purchase
Software Development in Germany
Revenue (2015-2030)
IBISWorld Logo Source: IBISWorld

Industry outlook (2025-2030)

Market size is projected to grow over the next five years.

Trends and Insights

Artificial intelligence offers efficiency benefits for both programming service providers and client companies

  • The coding industry in Germany is undergoing a profound transformation thanks to artificial intelligence (AI), which significantly increases the efficiency of software development processes. AI platforms such as OpenAI Codex, GitHub Copilot and TabNine are excellent tools for developers as they enable the automation and optimisation of coding activities. These platforms utilise advanced machine learning algorithms to generate code suggestions in real time, improving both the accuracy and speed of development processes. Developers can work more frequently on complex and creative tasks, while repetitive coding work is reduced.

Biggest companies in the Software Development in Germany

Company
Market Share (%)
2025
Revenue (€m)
2025
SAP SE
4,107.0
Microsoft Deutschland GmbH
1,353.0
Datev eG
1,133.0

To view the market share and analysis for all 6 top companies in this industry, view purchase options.

Products & Services Segmentation

Software Development in Germany
Products & Services
IBISWorld Logo Source: IBISWorld

Industry revenue is measured across several distinct product and services lines, including Business management software, Entertainment, multimedia and Internet software and Software components. Business management software is the largest segment of the Software Development in Germany.

Trends and Insights

The demand for business management software is increasing

  • The business software segment includes software for order processing and invoicing, for production planning and control and programmes for warehousing and ordering as well as for finance and accounting.
  • More insights available in the full report

Table of Contents

About this industry

Industry definition

The programming sector deals with the development and customisation of software for Internet presences. The writing of software documentation also falls within its field of activity. This does not include consultancy services in the field of information technology or the operation of data processing facilities for third parties.

What's included in this industry?

Business management softwareEntertainment, multimedia and Internet softwareSoftware componentsIntegrated software (firmware)Technical software

Companies

SAP SEMicrosoft Deutschland GmbHDatev eG

Purchase this report to view all 6 major companies in this industry.

Related Terms

BIG DATABLOCKCHAINCLOUDFINTECHREGTECHARTIFICIAL INTELLIGENCE (KI)SMART CONTRACTS

Industry Code

WZ 2008

WZ 62.01 - Software Development in Germany

Performance

Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.

Analyst insights

The industry is suffering from a chronic shortage of skilled labour, which means that companies are unable to fill their vacancies. In view of the increasing level of digital...

In this chapter (4)

  • Current Performance
  • Outlook
  • Volatility
  • Life Cycle

Key metrics

  • Annual Revenue, Recent Growth, Forecast, Revenue Volatility
  • Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
  • Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
  • Total Profit, Profit Margin, Profit per Business

Charts

  • Revenue, including historical (2015-2024) and forecast (2025-2030)
  • Employees, including historical (2015-2024) and forecast (2025-2030)
  • Businesses, including historical (2015-2024) and forecast (2025-2030)
  • Profit, including historical (2015-2025)
  • Industry Volatility vs. Revenue Growth
  • Industry Life Cycle

Detailed analysis

  • Trends in supply, demand and current events that are driving current industry performance
  • Expected trends, economic factors and ongoing events that drive the industry's outlook
  • Key success factors for businesses to overcome volatility
  • How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.

Products and Markets

Learn about an industry's products and services, markets and trends in international trade.

Analyst insight

The share of sales generated with technical software is growing steadily due to the increasing need for digitalisation among companies and public institutions.

In this chapter

  • Products & Services
  • Major Markets

Key metrics

  • Largest market segment and value in 2025
  • Product innovation level

Charts

  • Products & services segmentation in 2025
  • Major market segmentation in 2025

Detailed analysis

  • Trends impacting the recent performance of the industry's various segments
  • Innovations in the industry's product or service offering, specialization or delivery method
  • Key factors that successful businesses consider in their offerings
  • Buying segments and key trends influencing demand for industry products and services

Geographic Breakdown

Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.

Analyst insights

The two southern German states of Bavaria and Baden-Württemberg are home to most of the companies in the industry. The programming service providers in the Süd region benefit...

In this chapter (1)

  • Business Locations

Charts

  • Share of revenue, establishment, wages and employment in each region
  • Share of population compared to establishments in each region in 2025

Tables

  • Number and share of establishments in each region in 2025
  • Number and share of revenue each region accounts for in 2025
  • Number and share of wages each region accounts for in 2025
  • Number and share of employees in each region in 2025

Detailed analysis

  • Geographic spread of the industry across Europe, and trends associated with changes in the business landscape
  • Key success factors for businesses to use location to their advantage

Competitive Forces

Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.

Analyst insights

Programmers are facing strong competition from companies abroad. Many international corporations are withdrawing development offices from countries with higher labour costs a...

In this chapter (4)

  • Concentration
  • Barriers to Entry
  • Substitutes
  • Buyer & Supplier Analysis

Key metrics

  • Industry concentration level
  • Industry competition level and trend
  • Barriers to entry level and trend
  • Substitutes level and trend
  • Buyer power level and trend
  • Supplier power level and trend

Charts

  • Market share concentration among the top 4 suppliers from 2020-2025
  • Supply chain including upstream supplying industries and downstream buying industries, flow chart

Detailed analysis

  • Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
  • Key success factors for businesses to manage the competitive environment of the industry.
  • Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
  • Key success factors for potential entrants to overcome barriers to entry.
  • Competitive threats from potential substitutes for the industry’s own products and services.
  • Key success factors for how successful businesses can compete with substitutes.
  • Advantages that buyers have to keep favorable purchasing conditions.
  • Advantages that suppliers have to maintain favorable selling conditions.
  • Key success factors for how businesses can navigate buyer and supplier power.

Companies

Learn about the performance of the top companies in the industry.

Analyst insights

SAP is actively working on expanding its training programmes and developing low-code and no-code platforms. This is intended to support companies in the training of IT specia...

In this chapter

  • Market Share Concentration
  • Companies
  • Company Spotlights

Charts

  • Industry market share by company in 2021 through 2025
  • Major companies in the industry, including market share, revenue, profit and profit margin in 2025
  • Overview of SAP SE's performance by revenue, market share and profit margin from 2019 through 2025
  • Overview of Microsoft Deutschland GmbH's performance by revenue, market share and profit margin from 2019 through 2025
  • Overview of Datev eG's performance by revenue, market share and profit margin from 2019 through 2025
  • Overview of revenue, market share and profit margin trend for 3 additional companies

Detailed analysis

  • Description and key data for SAP SE, and factors influencing its performance in the industry
  • Description and key data for Microsoft Deutschland GmbH, and factors influencing its performance in the industry
  • Description and key data for Datev eG, and factors influencing its performance in the industry
  • Description, key data and performance trends for 3 additional companies

External Environment

Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.   

Analyst insights

The turnover of software publishers is falling due to competition from cloud solutions, which are increasingly replacing the traditional licence model of software publishers. ...

In this chapter

  • External Drivers
  • Regulation & Policy
  • Assistance

Key metrics

  • Regulation & policy level and trend
  • Assistance level and trend

Charts

  • Regulation & Policy historical data and forecast (2015-2030) 
  • Assistance historical data and forecast (2015-2030) 

Detailed analysis

  • Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
  • Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
  • Key governmental and non-governmental groups or policies that may provide some relief for industry operators.

Financial Benchmarks

View average costs for industry operators and compare financial data against an industry's financial benchmarks over time. 

Analyst insights

Wages in the industry are expected to rise in the coming years due to increasing competition for skilled labour. This is likely to lead to an increase in personnel costs for ...

In this chapter

  • Cost Structure
  • Financial Ratios
  • Key Ratios

Key metrics

  • Profit margin, and how it compares to the sector-wide margin
  • Average wages, and how it compares to the sector-wide average wage
  • Largest cost component as a percentage of revenue
  • Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio

Charts

  • Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2025
  • Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2025
  • Investment vs. share of economy

Data tables

  • Cash Flow & Debt Service Ratios (2015-2030)
  • Revenue per Employee (2015-2030)
  • Revenue per Enterprise (2015-2030)
  • Employees per Establishment (2015-2030)
  • Employees per Enterprise (2015-2030)
  • Average Wage (2015-2030)
  • Wages/Revenue (2015-2030)
  • Establishments per Enterprise (2015-2030)
  • IVA/Revenue (2015-2030)
  • Imports/Demand (2015-2030)
  • Exports/Revenue (2015-2030)

Detailed analysis

  • Trends in the cost component for industry operators and their impact on industry costs and profitability 

Key Statistics

Industry Data

Data Tables

Including values and annual change:

  • Revenue (2015-2030)
  • IVA (2015-2030)
  • Establishments (2015-2030)
  • Enterprises (2015-2030)
  • Employment (2015-2030)
  • Exports (2015-2030)
  • Imports (2015-2030)
  • Wages (2015-2030)

Top Questions Answered

Unlock comprehensive answers and precise data upon purchase. View purchase options.

What is the market size of the Software Development industry in Germany in 2025?

The market size of the Software Development industry in Germany is €94.6bn in 2025.

How many businesses are there in the Software Development in Germany industry in 2025?

There are 50,010 businesses in the Software Development industry in Germany, which has grown at a CAGR of 3.3 % between 2020 and 2025.

Has the Software Development industry in Germany grown or declined over the past 5 years?

The market size of the Software Development industry in Germany has been growing at a CAGR of 2.2 % between 2020 and 2025.

What is the forecast growth of the Software Development industry in Germany over the next 5 years?

Over the next five years, the Software Development industry in Germany is expected to grow.

What are the biggest companies in the Software Development market in Germany?

The biggest companies operating in the Software Development market in Germany are SAP SE, Microsoft Deutschland GmbH and Datev eG

What does the Software Development in Germany include?

Business management software and Entertainment, multimedia and Internet software are part of the Software Development industry.

Which companies have the highest market share in the Software Development in Germany?

The company holding the most market share in Germany is SAP SE.

How competitive is the Software Development industry in Germany?

The level of competition is high and increasing in the Software Development industry in Germany.

Related Industries

Widen your competitive advantage with related industries

View all industries in Germany

Methodology

How are IBISWorld reports created?

IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.

Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.

IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.

What data sources do IBISWorld analysts use?

Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.

Key data sources in Germany include:

  • German Federal Statistics Office (Destatis)
  • European Statistics Office (Eurostat)
  • United Nations Comtrade

Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.

These sources include:

  • Industry and trade associations
  • Industry federations or regulators
  • Major industry players annual or quarterly filings

Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.

How does IBISWorld forecast its data?

IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.

IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.

Learn more about our methodology and data sourcing on the Help Center.