Software Testing Services
Business for Sale Industry Economics
2003 - 2020
2020 - 2026
Revenue for the Software Testing Services industry has grown more quickly than that of the overall Information sector over the five years to 2020, with industry revenue rising at an annualized rate of 12.1% to $6.1 billion during the current period.
Since testing is an integral part of the development process, demand for software testing services ultimately derives from total demand for software, including traditional software packages, cloud-based solutions and mobile applications.
Revenue for the Software Testing Services industry is estimated to grow at an annualized rate of 12.1% to $6.1 billion over the five years to 2020.
Outsourced testing services have also experienced a surge in demand over the past five years, siphoning some revenue from domestic players.
Nonetheless, rising business investment in software, the increased adoption of cloud-based testing and growth in automated functional testing have sustained demand for onshore software testing services, despite and growing reliance on outsourced IT services.
The Software Testing Services industry is expected to experience moderate growth following the COVID-19 (coronavirus) pandemic over the five years to 2025, with revenue rising at an annualized rate of 5.2% to $7.9 billion.
Favorable movements in business performance and continued expansion of service offerings are expected to drive demand for testing services.
In addition, the practice of outsourcing testing services will likely continue to grow in popularity, as more software developers see the value in hiring a dedicated company to handle testing.
In fact, software developers will increasingly involve end-to-end software testing companies in every aspect of development, from early strategizing to final testing.
However, increased reliance on offshored or nearshored testing services will ultimately limit the growth potential of the domestic industry.
This industry provides software testing services for clients, such as performance testing, stability testing, usability testing and security testing.
This industry does not sell its own software, but it may use internally developed software to complete its testing tasks.
The capital intensity of the software testing services business is low. The research expects that industry operators will invest $0.02 in capital expenditures for every dollar spent on labor in 2020.
The large proportion of labor-related revenues indicates software testing’s service-oriented character, and the need for high education. Larger organizations are more labor-intensive in the business since they employ much more qualified personnel.
Companies must also dedicate substantial means to ensuring that their hardware and software are up-to-date for running and testing developing software systems.
The widespread use of cloud-based testing typically reduced capital requirements for onshore software testing, putting downstream capital pressure. In the five-year period through 2020, research anticipates the intensity of capital to stay relatively low.
In five years to 2020, the sector of software testing services has endured low turnover volatility. The industry sales have only seen doubling-digit and high single-digit sales during the present era, given that the fast-growing industry benefits from the COVID-19 pandemic.
There has been some fluctuation in revenue growth because of the rival pressures of increasing dependence on software developers’ outsourced testing services and heavy rivalry of international software testing organizations.
The final result for domestic operators was fairly variable and quick growth. Moreover, because of the cyclical variation in broader economic circumstances and private investments in computer systems, the vital role of software testing in the software development process has led to variable demand for industry services.