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Market Overview:
Software rental services allows users to access software for a pre-determined rental period without purchasing them. Users of these services are offered flexible subscription plans with monthly, quarterly or annual billing options. This helps companies avoid large upfront costs associated with software licenses and enables them to access a variety of productivity and collaboration software. Key software offered through rental services include office suites, graphic design software, video conferencing tools, project management apps and customer relationship management platforms. The on-demand access to a wide range tools eliminate the need for huge capital investments and allows organizations to scale their software needs as per requirements.
The global Software Rental Service Market is estimated to be valued at US$ 42.92 Bn or 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:
The adoption of subscription billing models across the software industry is a major trend positively impacting the rental service market. Vendors are recognizing the advantages of recurring revenue streams and transitioning away from perpetual license sales. Most leading software companies have shifted their commercial strategies towards rental/subscription plans in last few years. For instance, Microsoft now offers Office 365 through monthly/annual subscriptions instead of one-time licenses. Similarly, Adobe Creative Cloud and Salesforce make tools available through flexible rental packages. This transition helps vendors build strong, long term customer relationships and gain a more predictable revenue flow. It also offers easy budgeting options to end users and lets them pay for only what they need.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the software rental service market is low due to existence of established players and high initial capital requirement for R&D.
Bargaining power of buyers: The bargaining power of buyers is high due to availability of substitutes and flexibility in switching between brands.
Bargaining power of suppliers: The bargaining power of suppliers is moderate due to availability of alternatives in the market.
Threat of new substitutes: The threat of new substitutes is moderate as new entrants are introducing innovative technologies at regular intervals.
Competitive rivalry: High due to presence of established global players competing on the basis of pricing and product features.
Key Takeaways
The global Software Rental Service Market is expected to witness high growth, exhibiting CAGR of 6.0% over the forecast period, due to increasing demand for low-cost subscription-based software. The market size for Software Rental Service Market is estimated to reach US$ 42.92 Bn by 2023.
Regional analysis
North America dominates the global Software Rental Service Market, with a share of over 35%, due to high adoption of cloud-based technologies. Asia Pacific is expected to witness fastest growth during the forecast period owing to rapid digitization and increasing internet penetration in countries such as China and India.
Key players
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., HubSpot Inc. Adobe and Microsoft capture over 30% share of the global market due to their diverse product portfolio and strong brand identity.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
