Software industry will be among first to recover from the pandemic, says PwC

close-up of code on computer screen

The software industry will be among the first to recover from the COVID-19 crisis, according to new analysis from PwC.

Pre-pandemic consensus forecasts suggested the global software market would grow between 6% and 9% in 2020, according to the report 'Where Next for the Software Industry'. A revised forecast puts that growth closer to 1%, though this still represents a relatively strong performance in these difficult times.

Like most industries, there are likely to be delays of new business deals as software buyers are forced to push back expenditure, but PwC still expects the market to be one of the first to bounce back from the coronavirus crisis.

"Software is likely to be among the first industries to recover from the COVID-19 crisis," the report suggests. "Certain segments will even benefit from accelerated adoption of digital solutions by businesses to enable flexible working, social distancing and automation.

"We also expect the transition of workloads off-premise to accelerate as organisations look to reduce fixed costs and capital expenditure on IT in future."

The report suggests that the sector's resilience is down to a number of factors, such as the majority of market spend, which is derived from medium-sized and large companies that are generally in a better position to withstand an economic downturn than startups.

Applications provided by the enterprise software industry are also critical to business operations and are therefore less likely to be targeted in cost reduction measures.

It also points to software vendor revenue models, which often have a significant upfront component and are very cash generative. As such, software licencing can typically include a recurring payment or one that is entirely recurring. These offer more confidence in future revenues.

However, the report does warn that the coronavirus will continue to present risks and problems, such as addressing new use cases or verticals, and calls on business to find ways to navigate and address these in the coming years.

Bobby Hellard

Bobby Hellard is ITPro's Reviews Editor and has worked on CloudPro and ChannelPro since 2018. In his time at ITPro, Bobby has covered stories for all the major technology companies, such as Apple, Microsoft, Amazon and Facebook, and regularly attends industry-leading events such as AWS Re:Invent and Google Cloud Next.

Bobby mainly covers hardware reviews, but you will also recognize him as the face of many of our video reviews of laptops and smartphones.