Spain Software Development Market - Forecast(2024 - 2030)

Overview

The Spain Software Development Market size is forecasted to reach EUR12,643 million by 2027, after growing at a CAGR of  8.52% during 2022-2027. According to Digital Economy and Society Index 2021, Spain ranks third in the EU in connectivity and seventh in digital public services, with levels well above the European average. The Spanish government’s commitment to digitalization is strong. The Digital Spain Plan 2025features specific strategies to promote technologies that are crucial for Spain: 5G, cybersecurity, Big Data and Artificial Intelligence. Its commitment to communications and new technologies has also been reinforced by Europe’s commitment to digital transformation as a lever for transforming the economy. Spain is a leader in the deployment of 5G technology. According to the DESI Index, it has maintained its excellent position thanks to the spectrum released in adopting 5G technology and the number of projects completed.

Report Coverage

The report “Spain Software Development Market– Forecast (2022-2027)”by IndustryARC, covers an in-depth analysis of the following segments in the Spain Software Development market. 

By language: Java, Python, C++, Scala, Ruby, LISA, PERL, SQL, Android, iOS and Others.

By Market Demand: In-house on Payroll, Hired from Secondment Providers, Hired Freelancers and Fully Outsourced.

By Deployment Type: On-premise and Cloud.

By Business Size: Small and Medium Business, Enterprise and Government.

By End-use Industry: Banking and Financial Institution, Insurance Firms, Media and Entertainment, Government, Defense, Telecommunication, Automotive, Consumer Goods and Retail, Healthcare, Manufacturing and Others

Key Takeaways

v  In early 2021, Spanish start-ups secured €1.9 bn in VC investment, according to data from Dealroom. That is nearly four times more than the first half of 2020 when €500 million was raised. It is a real indicator that Spain’s tech sector is bouncing back stronger than ever from the depths of the pandemic.

v  The Spanish insurance industry is changing as insurers embrace insurtech innovations. The modernization of core legacy systems, new insurance exchanges, and the development of business models would define the insurance industry in Spain. Insurtech firms and products continue to capitalize on the inefficiencies of older, more traditional providers.

v  Modern transportation and telecommunication infrastructures favor the establishment of ICT companies. The IoT sector growth is directly related to the fulfillment of the SDGs and the commitment to energy efficiency. Spain is in an excellent position due to the quality of its infrastructure and advances in the area of 5G.

Language- Segment Analysis

Java hold the largest share in the Spain Software Development Market in 2021. According to IndustryARC, Java is at the top of the list and is still the tool of choice for many teams around the world. Given the popularity of web technologies, Python is the second most popular language in Spain in terms of revenue. C++ is also much more popular in Spain. Spanish software developers also use newer technologies such as Node. js. Android language is yet another popular software language in Spain. There are more than 26,909 apps from Spanish publishers out of the 2,937,948 apps on Google Play. As the region receives a wave of venture funding and interest from tech companies, there is growing momentum to address the region's tech community's labor shortage by empowering workers to operate in Spanish. Software developers like Román, coding bootcamps and meetup groups have launched their own initiatives, ranging from translating educational materials to developing a programming language based on Spanish.

Market Demand- Segment Analysis

In-house on payroll held the largest share in the Spain Software Development Market in 2021. According to the research data, the most difficult positions to fill in Spain today are also the most in demand: Big Data, Data Scientist, Computer programmer and Computer engineer. The 6th EPyCE Report 2019 shows a scenario with future positions that reflect companies’ commitment, not only in terms of digital transformation but also compliance with the Sustainable Development Goals (SDG).The Infojobs employment platform has released its 'State of the Labor Market in Spain 2021,' which shows the huge demand for IT professionals in Spain. In particular, over the last year, nearly 200,000 vacancies were posted by companies looking for this professional profile. Software developers are in high demand in the field of information technology and telecommunications.

Deployment Type - Segment Analysis

Cloud held the largest share in the Spain Software Development Market in 2021. In most technological sectors, such as information and communications or professional, scientific and technical activities, Spanish firms have a high level of digital technology penetration comparable to their European counterparts. In fact, 64% of Spanish companies in the information and communications sector purchase cloud computing services, which is the same as the EU average. AWS plans to open a cloud infrastructure region in Spain. Expected to launch in late 2022 or early 2023, AWS Spain would consist of three Availability Zones - geographically separate data centers. Currently, AWS provides 69 such locations across 22 cloud infrastructure regions worldwide. It also has 13 more planned "zones" and 4 Regions in Indonesia, Italy, South Africa and Spain. Spanish Prime Minister Pedro Sanchez said, “This investment from AWS will allow Spain to fully adapt to the digital transformation and develop as an international center of innovation and technology. Cloud computing will enable the Public Administration to improve the services it delivers to Spanish citizens, in addition to fostering technical advances in the private sector.”

Business Size- Segment Analysis

Small and Medium Businesses held the largest share in the Spain Software Development Market in 2021. Spain is therefore the country that would receive most funds from the Recovery, Transformation and Resilience Plan (Next Generation EU): up to €140 billion between 2021 and 2026, 23.1% of which would go to the modernization and digitalization of industry, SMEs and tourism, as well as promoting entrepreneurship in Spain. The funds would focus on SMEs, authorities and citizens. The Digital Toolkit Program includes enabling tools, training, websites, ERP management systems, CRM management systems, internet sales, digital marketing systems and many more. The Spanish government’s goal is to increase e-commerce to 25% of SME business, compared to the current volume which is under 10%.The Digital Toolkit plan stands out. With an initial investment of €3 billion between 2021 and 2023, it is focused on the basic digitalization of SMEs.

End-use Industry - Segment Analysis

Based on the end-use industry, the government held the largest share in the Spain Software Development Market in 2021. The Ministry of Justice has developed the Justice Plan 2030 to strengthen digital services for individuals, businesses and groups while also progressing toward long-term judicial management. In terms of employment, the information systems that support unemployment benefits and employment activation programmers would be strengthened. The government seeks to transition to a 21st-century administration by implementing reforms and investments that would enhance administrative procedures as well as digital skills and accessible resources. The public sector of the various administrations would act as a point of support and a lever for the massive digital transitions that Spain requires.

Drivers –Spain Software Development Market

·         The rapid rate of progress in digitization:

The digital economy in Spain is booming. Some companies are global successes, while many others are showing signs of growth. To encourage the execution of the Digital Spain 2025 Agenda, the Connectivity Plan includes a public investment of €2,320 million through 2025. All Spanish businesses have access to broadband Internet and the cost of a faster Internet connection has decreased year on year. Furthermore, Spain has the third-largest fiber optic network in the world, trailing only South Korea and Japan. This is a fantastic accomplishment that demonstrates Spain's ability to construct a world-class infrastructure, capable of providing a fast Internet connection practically universally. More than eight out of ten Spanish households have broadband Internet access (83% in 2017 vs. 28% in 2006) and 78% use mobile devices to access the Internet while on the go. Strategy to Promote 5G is supported by public investment of €2,000 million until 2025. Also, the National Strategy for Artificial Intelligence is backed bya public expenditure of €600 million between 2021 and 2023.According to a study by Nominalia, during their free time, 2 out of 5 internet users in Spain spend more than 3 hours per day online.

·         Increase in new technology adoption and integration

In terms of digital technology integration, Spain ranks 13th, in line with the EU average. Spanish firms take advantage of the opportunities provided by digital technologies and are ahead of Europe in the use of electronic information exchange systems (43% vs. 34%), though slightly behind in access to macrodata analysis (11% vs. 12%) and cloud use (16% compared to 18%). According to the report, in terms of emerging technologies, Spain has developed a substantial number of coordination measures, particularly in the field of cyber security. Furthermore, the use of Internet services has increased since the previous year and the country has achieved results that are higher than the EU average. However, it is worth noting that it is still used more for leisure activities (such as watching videos) than for day-to-day business, such as banking or e-commerce. Spain is enacting strict new penalties for using pirated software. For example, Microsoft's fight against piracy is reaching new heights in Spain. In Spain, a woman was recently sentenced to prison for pirating Windows and Office.

Challenges – Spain Software Development Market

·         Regulatory Barriers

Policymakers in Spain should be mindful that technology has blurred the distinction between digital and non-digital economies. There are rules and regulations in the digital and product markets that are impeding the spread and growth of the Spanish digital economy. This is reflected in the statistics. Spain is one of several European countries with higher-than-average restrictions on digital trade and these restrictions hurt Spanish production. According to the Secretary of State for Digital Advancement and President of the Spanish Association of the Digital Economy, Spain does not hold a significant position among the group of leading countries in terms of digitalization, neither worldwide nor in its European context.

·         Ease of Doing Business

Spain is ranked 97th globally for ease of starting business rankings in the Doing Business Report. Around 7 procedures need to be completed, including securing a certificate of availability for the proposed company name; opening a corporate bank account and depositing funds and securing via a notary the registered public deed of incorporation and the necessary fiscal identification number. In terms of getting credit, the World Bank and IFC rank Spain 53rd in the world, which is lower than most of its European counterparts. Enforcement of contracts takes 510 days and 40 procedures. Also, paying taxes takes 167 hours per year with 8 separate payments to be considered.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Spain Software Development market. In 2021, the Spain Software Development Market share has been consolidated by the top ten players accounting for a significant share. Major players in the Spain Software Development Market are Amaris, Imatia, Develop Software and others.