March 2, 2024

Affordable Access to Business Tools is Driving the Software Rental Service Market

 

The software rental service allows businesses, especially startups and small-to-medium enterprises to access enterprise-level business software on monthly or annual subscription basis rather than buying expensive perpetual licenses. This provides cost savings as well as flexibility to change or upgrade software as per changing business needs. Popular software available through rental services include productivity suites, CRM, project management, HR management, Financial management, cloud services and others. The rental model delivers all the capabilities of licensed software through simple monthly subscription plans while avoiding large upfront costs. This has increased the adoption of advanced tools that can help businesses improve efficiency and gain competitive advantage.

The global Software Rental Service Market is estimated to be valued at US$ 42.92 Bn in 2023 and is expected to exhibit a CAGR of 6.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
One of the key trends in the software rental service market is the growing popularity of the “Software-as-a-Service”(SaaS) model. With SaaS, software is centrally hosted on cloud servers and accessed online by users via web browsers, without requiring any installation. This has further lowered the entry barriers for businesses to access advanced tools through simple subscription plans without large upfront costs or need for IT infrastructure. SaaS also provides advantages like easy updates/upgrades, scalability, collaboration and mobility access from any device. Leading software companies are increasingly shifting to the SaaS model to drive adoption and monetization of their products through the rental service model. This has led to rising investments in cloud infrastructure and related technologies, propelling the software rental service industry.

Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as significant capital investments are required to enter the market and compete with major players. However, the flexibility of business models and ease of scalability allow new players to enter the market.

Bargaining power of buyers: The bargaining power of buyers is high as the market has a low switching cost and buyers can choose from various software options. Buyers can negotiate on price or demand additional services.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as software developers and providers have considerable influence. However, the market has many supplier options for buyers to choose from.

Threat of new substitutes: The threat of new substitutes is moderate as new technologies are constantly emerging. However, most substitutes require similar marketing and R&D investments limitingQuick adoption.

Competitive rivalry: The competitive rivalry is high among major market playersdifferentiating through innovative offerings and competitive pricing. Companies compete actively to attract more customers and gain high market shares.

Key Takeaways
The global Software Rental Service Market is expected to witness high growth.

The North American region dominates the market currently due to high technology adoption rates and presence of key players. Factors like increasing digitization trends, cost benefits of renting over buying, and flexible business models are fueling market growth in the region.
The Asia Pacific region is expected to grow at the fastest pace during the forecast period. Rapid digitalization of industries and adoption of smart work models are driving the market. Countries like China, Japan, and India offer immense growth opportunities with increasing investments in cloud infrastructure and services.

Key players operating in the Software Rental Service Market are Adobe Inc., Microsoft Corporation, Salesforce.com Inc., Oracle Corporation, Intuit Inc., SAP SE, Autodesk Inc., IBM Corporation, Dropbox Inc., Slack Technologies Inc., Google LLC, Zoom Video Communications Inc., Atlassian Corporation Plc, ServiceNow Inc., and HubSpot Inc. Major players are focusing on product innovations and expansions to cater to diversified customer demands and strengthen their market presence. Strategic collaborations are also witnessed as players aim to enhance their offerings.

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  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it