Independent Software Vendor Market Outlook - Forecast Trends, Market Size, Share and Growth Analysis Report (2025-2034)

The global independent software vendor market was valued at USD 2.12 Billion in 2024. The industry is expected to grow at a CAGR of 9.20% during the forecast period of 2025-2034 to reach a value of USD 5.11 Billion by 2034. The rising number of investments in digital transformation projects worldwide is the key driver propelling the global independent software vendor market.

Key Market Trends and Insights:

• The North America software vendor market dominated the market in 2024 and is projected to grow at a CAGR of 9.9% over the forecast period driven by its booming tech industry.
• By country, India is expected to grow at a CAGR of 10.5% over the forecast period.
• By deployment type, cloud category is projected to witness a CAGR of 13.6% over the forecast period.
• By industry vertical, the retail and e-commerce sector is expected to register the fastest CAGR over the forecast period with the growing adoption of AI powered solutions.

Market Size & Forecast:

• Market Size in 2024: USD 2.12 Billion
• Projected Market Size in 2034: USD 5.11 Billion
• CAGR from 2025 to 2034: 9.20%
• Fastest-Growing Regional Market: North America

Government bodies and private organizations alike are actively working to modernize business operations with the integration of automation and AI technologies. To cite an instance, the Government of India allocated Rs 782 crore for digital transformation in the 2025-2026 budget, representing a 143% jump from the 2024-2025 budget. This was to promote digital transportation and AI adoption in India. Several enterprises are deploying specialized software solutions from ISVs owing to the advantages it offers, such as improved efficiency and lower operational costs.

Additionally, the ongoing efforts by tech firms in creating tech adoption platforms further contribute to independent software vendor industry growth. Citing a prime example, in April 2025, Convoso, a leading CCaaS provider, developed an ISV Partner Marketplace to help contact centers find integrated third-party solutions and enable ISVs to find new customers, while strengthening Convoso’s tech ecosystem. With such tools, businesses are optimizing workflows and gaining real-time insights for smarter decision-making, further contributing to the growing need for independent software vendors.

Another factor contributing significantly to the market expansion is the formation of strategic partner ecosystems between ISVs and leading platform providers such as IBM, Microsoft, AWS, Salesforce, and Oracle. Such partnerships offer opportunities like co-selling channels, extensive app marketplaces, and marketing support, offering a wide access to independent software vendor markets. For example, in June 2025, Primer Technologies, a leading AI solutions provider, joined the AWS ISV Accelerate Program that connects independent software vendors with AWS Sales to generate new business. This enabled Primer to diversify its reach by integrating its products within the AWS ecosystem and benefiting from co-selling opportunities.

Key Trends and Recent Developments

March 2025

Evoila, a tech solutions provider, partnered with Mia-Platform, an ISV offering an AI-Native Developer Platform Foundation to help industries adopt modern software engineering by combining Mia-Platform’s technology with Evoila’s expertise. Additionally, they enable efficient implementation of Internal Developer Platforms, simplifying development and supporting scalable, high-performance software delivery.

December 2024

AWS and Ingram Micro signed a multi-year Strategic Collaboration Agreement (SCA) aiming to deliver higher value to partners and independent software vendors, thereby strengthening their joint commitment to support the ISV ecosystem.

December 2024

Worldline, a global payment services provider, launched FlexPricing, a platform which lets ISVs apply for flexible fee structures and monetize EFT/ACH transactions. This platform simplified billing while creating new income opportunities by allowing Worldline to manage invoicing and operational tasks.

October 2023

Zoom launched the ISV Exchange Program, allowing it to sell and integrate strategic ISVs’ best-in class solutions directly within its platform. This initiative offers a unified experience for customers by combining Zoom’s capabilities with partner technologies to meet evolving business needs.

Increasing cloud & SaaS adoption fuels need for migration focused ISVs

The ongoing transition to cloud-native and Software-as-a-Service (SaaS) models is propelling the ISV market forward. Amid this shift, ISVs have gained importance in facilitating secure and scalable cloud migrations, specifically from legacy or on-premises systems. Many enterprises lack in-house cloud expertise, propelling the need for ISVs which provide comprehensive support and services for data migration into cloud. For instance, in June 2025, SentinelOne partnered with the AWS ISV Workload Migration Program, providing secure workload transitions to AWS through its Singularity Cloud Security platform, which equips ISVs with tools and support to securely migrate customer workloads to AWS.

Rising demand for scalable technology in the healthcare sector

Increasing adoption of healthcare technology emerged as a prominent driver of ISV market development, attributed to the increasing competitive, societal, and regulatory constraints. The rapidly evolving technological landscape is pushing healthcare companies to rely on ISVs to create intelligent software solutions that enable data integration into diverse platforms. Owing to the tight regulatory constraints, the need for scalable, outcome-focused solutions is rising, propelling the demand for ISVs to bridge the innovation gap. For instance, in March 2023, Innovaccer's ISV Partner Program attracted many digital health vendors that are developing interoperable solutions capable of connecting into EHR workflows as well as promoting holistic care delivery.

Increasing AI Adoption across industries is fueling demand for ISVs

The preference for embedded analytics, AI-powered insights, and intelligent data integration is rising, leading to independent software vendor industry growth, specifically in sectors relying on real-time decision-making and data-rich environments. Enterprises are shifting towards smarter, data-driven applications to transform software delivery. This is pushing ISVs to focus on creating integrated, scalable, and secure platforms that reduce complexity while driving innovation and growth. For instance, in April 2025, Qlik launched a dedicated ISV platform to help vendors embed AI, analytics, and data integration capabilities directly into their applications.

Rising demand for customized software solutions in financial services

The mounting need for software that aligns with unique workflows of businesses is driving the independent software vendor market growth. Off-the-shelf solutions lack features which meet complex industry requirements, prompting organizations to invest in configurable and modular platforms from ISVs. The growing emphasis on precision, compliance, and operational efficiency in the finance sector has increased the reliance on software that streamlines financial processes, thereby propelling market growth forward. Addressing this need, in May 2025, four prominent ISVs in the Microsoft Dynamics ecosystem collaboratively created a unified suite enhancing financial automation, fully integrated into the Dynamics 365 environment.

Increased IT Spending & Compliance Needs

Increasing IT budgets and high global regulatory demands are significantly driving the ISV market. Enterprises are allocating more resources to upgrade legacy systems, adopt cloud technologies, and enhance cybersecurity measures, creating fertile ground for ISVs offering reliable and scalable solutions. ISVs that provide certified, compliant applications are gaining trust among organizations that prioritize mitigating risks and avoid penalties. This convergence of increased IT investment and regulatory pressure further fuels the demand for sophisticated, certified ISV products.

Global Independent Software Vendor Industry Segmentation

The report titled “Global Independent Software Vendor Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product

• Security Software
• Business Intelligence and Analytics
• Business Applications
• Consumer-facing Applications
• Others

Key Insight: Based on product, the security software segment amassed substantial revenue in the independent software market owing to the growing number of cyber-attacks and stringent regulatory compliance requirements. Meanwhile, the business intelligence & analytics segment is recording steady growth due to the growing need for real-time insights and data-driven decision-making across industries. Similarly, the business applications segment contributes largely to market share as enterprises are investing in the use of ERP and CRM solutions to simplify operations, enhance collaboration, and increase productivity. Moreover, the consumer-facing apps segment is expanding owing to growing demand for personalized, seamless digital experiences in retail, entertainment, and leisure industries.

Market Breakup by Deployment Type

• On-premises
• Cloud

Key Insight: In terms of deployment type, cloud is the fastest-growing segment of the independent software vendor industry. Cloud-native ISVs are leveraging SaaS, PaaS, and API-driven models to deliver flexible, subscription-based software with constant updates providing global reach. Additionally, the rise of hybrid tech environments amplifies demand, as companies prefer to combine on-premises control and cloud agility. On the other hand, the on-premises segment is experiencing steady growth as it continues to serve industries where security and regulatory compliances and data sovereignty requirements are high. ISVs offering such high-control software for these sectors address legacy infrastructure and compliance needs, thereby driving market growth.

Market Breakup by Enterprise Type

• SMEs
• Large Enterprises

Key Insight: The global independent vendor market growth is significantly driven by the evolving demands of the large enterprises segment. Large enterprises require highly customizable, secure, and integrated software to manage complex operations, ensure regulatory compliance, and support global scalability. Such organizations are making high investment in tailored ISV solutions. On the other hand, the SMEs segment is experiencing high demand for cost-effective, scalable, and easy-to-deploy software that enables rapid digital adoption without needing extensive IT infrastructure. Moreover, SMEs fuel the demand for ISVs by adopting user-friendly, cloud-based solutions with flexible pricing, enabling cost-effective scalability, and rapid digital adoption.

Market Breakup by Industry Vertical

• Healthcare
• BFSI
• Manufacturing
• Retail and E-commerce
• IT and Telecom
• Automotive
• Government
• Others

Key Insight: The healthcare segment’s growing demand for digital solutions to improve patient outcomes and comply with regulations is driving the independent software vendor market growth. In BFSI, the need for compliant, secure and efficient financial software is fueling the adoption of specialized ISV offerings. The manufacturing segment is driving ISV demand through increasing automation, industry 4.0 initiatives, and supply chain optimization. In the retail and e-commerce segment, the need for agile, omnichannel platforms is propelling the need for ISV solutions. The IT and telecom segment rely on scalable infrastructure and analytics tools to support rapid digital transformation, thereby positioning ISVs as essential. Meanwhile, in the automotive segment advances in connected vehicles and smart mobility solutions, while in the government segment’s push for secure, on-premises systems, and digital services is further expanding growth opportunities.

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Key Insight: North America leads the independent software vendor industry owing to the presence of mature digital infrastructure along with innovation hubs fostering cloud and AI integration. Europe follows closely, mainly due to stringent data privacy regulations like GDPR and a focus on sustainable, compliant software. Asia Pacific is the fastest-growing region propelled by the rapid digital transformation in China, India, and Southeast Asia, coupled with the government support for SMEs and digitization initiatives. Latin America is gaining momentum through hefty IT investments and a growing startup ecosystem. Meanwhile, the Middle East and Africa are still emerging markets attributed to the ongoing smart city projects, rapid cloud adoption, and government modernization programs, altogether expanding ISV opportunities.

Global Independent Software Vendor Market Share

By Product, Business Applications lead in Market Share

Based on product, the business applications product segment has secured a dominant share in the independent software vendor industry. The segment growth is majorly attributed to the surge in demand for intelligent, integrated tools that streamline enterprise functions such as finance, HR, supply chain, and customer management. With the shift towards hybrid work models and prioritizing automation and remote collaboration, ISVs are stepping in with tailored, cloud-based solutions that outperform traditional software suites. Their ability to offer modular, API-driven platforms that adapt to unique business workflows and compliance needs makes them a need. Reinforcing this trend, in July 2024, Omnissa’s launch as an AI-powered digital workspace platform highlighted how ISVs are shaping the future of enterprise software delivery. Such initiatives are supporting market expansion.

Security software is starting to emerge as a significant growth driver in the global independent software vendor industry, as enterprises encounter heightened cyber threats and rely heavily on third-party providers for security. With the increase of ransomware, phishing, and data theft, organizations need agile, cloud-native solutions that enable rapid setup and real-time security. According to the Identity Theft Resource Center, data breaches increased to 3,205 in 2024, up from 2,365 in 2023, 1,584 in 2022, and 754 in the year 2018, underlining the critical need for strong cybersecurity. ISVs that specialize in endpoint protection and compliance-ready frameworks are in high demand, making them essential partners in today's digital-first market.

By Deployment Type, Cloud Deployment is the largest segment of the market

Cloud deployment is the largest segment primarily driven by the growing need for flexible, resilient, and scalable infrastructure to support modern application development. With rapid digital transformation across industries, enterprises are prioritizing platforms that offer faster time-to-market, reduced data duplication, and simplified operations. Cloud-based deployments provide ISVs with the agility to iterate rapidly, lower total cost of ownership, and provide seamless user experience across web, mobile, and IoT environments. For example, in February 2023, Couchbase expanded its ISV Partner Program to empower vendors with Capella, a cloud-native database platform that enhances speed, scalability, and operational efficiency in cloud app delivery. Such developments are propelling industry growth.

While cloud-based models are gaining ground, the on-premisessegment remains vital in the ISV market, especially for sectors with stringent data control, security, or compliance needs, such as government, defense, banking, and healthcare. Additionally, these deployments are favored in regions or industries where regulatory mandates restrict data transfer or where cloud infrastructure is still under development. By providing tailored, high-performance solutions with offline operability and long-term support, ISVs in the on-premises space are significantly contributing to market expansion.

By Enterprise Type, Large Enterprises represent a dominant segment

Large enterprises dominate the ISV market due to their need for highly integrated, secure, and customizable software that supports complex operations, global supply chains, and regulatory compliance. ISVs working with these enterprises often develop advanced solutions incorporating AI, automation, and analytics to meet multi-departmental demands. These collaborations typically involve longer sales cycles but yield higher revenues and long-term contracts. Moreover, large enterprises actively co-develop and adopt cutting-edge technologies with ISVs, making them key innovation partners and propelling overall market sophistication and expansion.

The SMEs segment is significantly contributing to the ISV market growth as they increasingly embrace digital solutions to streamline operations and scale efficiently. Lacking dedicated IT teams, SMEs turn to ISVs for cloud-based, affordable, and user-friendly applications that support agility and business continuity. ISVs cater to this segment with modular, subscription-driven software that ensures fast implementation and flexible usage. The demand for quick ROI and intuitive interfaces further drives ISV adoption. As digital transformation accelerates in emerging markets, SMEs are becoming vital to the global expansion and evolution of the ISV ecosystem.

By Industry Vertical, the Retail and E-commerce generated substantial market revenue

In terms of industry vertical, the retail & e-commerce segment holds a dominant share in independent software vendor industry and is set to expand at 10.5% CAGR through 2025-2034 resulting from the growing demand for AI-powered, integrated frontline solutions. Innovations like AI-driven image recognition and conversational agents that solve merchandising and operational challenges further boost adoption within retail and e-commerce. For instance, in January 2025, Zebra Technologies developed Mobile Computing AI Suite and Zebra Companion to integrate AI capabilities into retail workflows. This encouraged ISVs to build smarter, real-time applications in the retail sector. Such innovations are creating ample opportunities for ISVs to deliver custom software solutions to the sector’s evolving needs.

Moreover, the IT and telecom segment is emerging as a fast-growing segment due to the ongoing efforts for network modernization, particularly through 5G deployment. One such effort is, in May 2025, China Mobile allocated 9.8 billion yuan ($1.4 billion) to upgrade more than 400,000 base stations to 5G-A this year. For such telecom projects, operators require sophisticated software solutions for management of such complex 5G infrastructure, including network slicing, service orchestration, and automation. ISVs play an essential role as they offer platforms that enable real-time monitoring, predictive maintenance, and efficient resource allocation, while ensuring high-quality service delivery. Moreover, 5G’s low latency and high bandwidth offer new opportunities for ISVs, further contributing to industry growth.

Global Independent Software Vendor Market Regional Analysis

By Region, North America holds the largest share in the global Independent Software Vendor market

North America remains the dominant region in the global independent software industry share, majorly because of the heightened demand from enterprises for cloud, data, AI, and cybersecurity solutions. This growth is amplified by the region’s mature digital infrastructure, early cloud adoption, and stringent regulatory compliance. As enterprises prioritize innovation and security, they increasingly rely on ISVs for certified, scalable solutions tailored to their needs. Reflecting this dynamic, in October 2023, TD SYNNEX, a global distributor and solutions aggregator, recently launched an ISV Acceleration Program in North America, providing ISVs with technical resources, cloud marketplace access, and go-to-market support.

On the other hand, the Middle East and Africa region is the fastest-growing segment int he independent software vendor market, owing to the rapid digital transformation and government-led smart city initiatives. The growing need for integrated, niche enterprise solutions, especially across the African manufacturing and warehouse management sector is further boosting regional market growth. Furthermore, regional partnerships like SYSPRO’s ISV referral agreement with DATASCOPE WMS signed in February 2025 reflected the efforts of trusted third-party vendors. This improved ERP systems with dedicated, cost-effective tools for simplifying operations and supporting the Industry 4.0 digital transformation.

Competitive Landscape

Key players in the global independent software vendor (ISV) market are fostering growth by investing in cutting-edge technologies such as cloud computing, artificial intelligence, machine learning, and edge analytics. Additionally, they assist ISVs in accelerating time-to-market, improving software performance, and meeting different customer expectations in industries such as banking, healthcare, manufacturing, and retail by providing flexible APIs, cloud infrastructure, and low-code solutions.

Along with technology help, these companies are promoting market expansion through strategic collaborations, innovation centers, training programs, and co-selling possibilities. Their emphasis on regulatory compliance, cybersecurity, and data protection enables ISVs to create products that satisfy worldwide standards. Furthermore, by broadening their worldwide reach and promoting ecosystem collaboration, they are fostering a favorable climate for smaller software companies to develop, scale, and succeed. This collaborative effort is resulting in a more nimble, efficient, and competitive global ISV ecosystem.

Adobe Inc

Adobe Inc., incorporated in 1982 and based in California, is well-known for its creative digital media tools. The company aggressively promotes independent software manufacturers via its Adobe Experience Cloud and Creative Cloud platforms. Adobe helps ISVs design, integrate, and deliver personalized digital experiences across several sectors by providing a diverse range of APIs, AI-powered tools, and cloud-based services.

Alphabet Inc

Founded in 2015 and headquartered in Mountain View, California, Alphabet Inc. is the parent company of Google and a key facilitator of cloud-based ISV solutions. Google Cloud Platform provides scalable infrastructure, AI and data analytics capabilities, and marketplace connections, allowing software suppliers to create creative, enterprise-grade apps. Alphabet is continuing to accelerate digital transformation by creating an open ecosystem for ISV cooperation and deployment.

Dell Technologies Inc

Dell Technologies Inc., founded in 1984 and based in Round Rock, Texas, provides a wide range of IT infrastructure and cloud solutions designed to promote software innovation. The firm collaborates closely with ISVs through its partner program and edge-to-core technology, offering processing capacity, data management, and collaboration tools to help them create and scale contemporary software applications.

HP Inc

HP Inc., founded in 2015 following the Hewlett-Packard split, is headquartered in Palo Alto, California. While HP has traditionally been associated with hardware, it has increasingly concentrated on software-driven solutions and collaborations that benefit ISVs. With a focus on workflow automation, print management software, and security solutions, HP allows ISVs to integrate their services with HP devices and platforms to create value-added business applications.

Other players in the global independent software vendor market include Cisco Systems Inc., IBM Corp., Microsoft Corp., Oracle Corp., Salesforce Inc., and SAP SE, among others.

Key Highlights of the Global Independent Software Vendor Market Report:

• Detailed market performance insights with projections through 2034.
• Evaluation of the latest technological advancements and modular solution trends in the global independent software vendor industry landscape.
• In-depth profiling of key domestic and global ISV leaders, partnerships, and market strategies.
• Identification of high-potential regions and emerging markets driving global ISV expansion.
• Data-backed insights enabling stakeholders to assess ROI potential and strategic moves.