The volume of data produced each year continues to demonstrate exponential growth. It will gain a further boost from the rise of the Internet of Things, which is being facilitated by the 5G roll-out. These factors remain the critical building blocks stimulating strong growth in the £28 billion software market. The disruption to the economy caused by efforts to contain the COVID-19 outbreak has caused specific short-term market changes, such as the growth of web conferencing. In the medium term, growth will suffer from economic disruption in end-use markets, but it will be stimulated in the long term by companies seeking growth through the scalable technology offered by cloud computing.

• The types of software that have seen sales growth due to the COVID-19 related social distancing restrictions.

• The medium and long-term implications of the changes introduced to end-use sectors by COVID-19.

• Why the growth of the market will accelerate after the initial disruption from COVID-19.

• How the cloud is continuing to gain share with important implications for the software sector.

This report is concerned with software sales in the UK. Software is the collective term for computer programs, which are instructions in code telling a computer what to do in response to specific user inputs.

There are four major areas of software referred to in this report:

• Operating systems. Every general-purpose computer must have an operating system to run other programs. Operating systems perform basic tasks, such as recognising input from the keyboard, sending output to the display screen, keeping track of files and directories on the disk, and controlling peripheral devices, such as disk drives and printers.

• An application is a program, or group of programs, designed for the end-user. Whereas systems software provides behind-the-scenes coordination and support, applications are front-end resources used by people to get things done. Applications software may be custom-designed by or for an individual corporate user, developed and sold as part of a computer hardware system with its own proprietary operating system, or developed and marketed independently for use on one or more of the standard operating systems, also referred to as off-the-shelf software.

• Custom software (also known as bespoke software or tailor-made software or proprietary software) is software that is specially developed for a specific organisation or user. It differs from software packages developed for the mass market, such as commercial off-the-shelf (COTS) software, or existing free software. Large companies commonly use custom software for critical functions, including content management, inventory management, customer management, human resource management, or to fill gaps present in existing software packages.

• Middleware is computer software that provides services to software applications beyond those available from the operating system. It mediates between two separate and often existing programs. Typically, it supports complex, distributed business software applications.

Other terms used in this report include:

• Cloud computing is the ability to use files and applications over the internet instead of hosting, storing, or processing them on locally managed hardware.

• Content, communications and collaboration software comprises products, tools and hosted services designed to organise, access, use and share content. Content management initiatives involve managing and interacting with a multitude of content types, including documents, records, images, forms and, increasingly, digital media.

• Customer relationship management (CRM) software is a system for managing a company’s interactions with current and future customers. It often organises, automates and synchronises sales, marketing, customer service, and technical support.

• Digital content creation software enables the creation or modification of digital content, such as animation, graphics, images or video, as part of the production process before presentation in its final medium.

• Enterprise Content Management (ECM) is the strategies, methods and tools used to capture, manage, store, preserve, and deliver content and documents related to organisational processes. ECM covers the management of information within the entire scope of an enterprise, whether that information is a paper document, an electronic file, a database print stream, or an email.

• Enterprise resource planning (ERP) is a business management software, usually a suite of integrated applications, that a company can use to collect, store, manage and interpret data from many business activities, including product planning cost; manufacturing or service delivery; marketing and sales, inventory management; shipping and payment. ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system.

• Enterprise software is purpose-designed computer software used to satisfy the needs of an organisation rather than individual users. Services provided by enterprise software are typically business-oriented tools, such as online shopping and online payment processing, interactive product catalogues, automated billing systems, security, enterprise content management, IT service management, customer relationship management, enterprise resource planning, business intelligence, project management, collaboration, human resource management, manufacturing, enterprise application integration, and enterprise forms automation.

• Office suites are a collection of programs for a personal computer that are used to automate common office tasks. The packages usually include word processing, spreadsheets, presentation, email, and database. These components are sold together and typically interface with each other.

• Project and portfolio management software enables corporate and business users to organise a series of projects into a single portfolio that provides reports based on various project objectives, costs, resources, risks and other pertinent associations. Project portfolio management software allows the user to review the portfolio to assist them in making key financial and business decisions for projects.

• Software as a service (SaaS) is a software distribution model where applications are hosted by a vendor or service provider and made available to customers over a network, typically the internet.

• Supply chain management software describes software applications that enable more efficient management of the supply chain.