APAC software market set to grow by more than 10% in 2024

The software industry in the Asia Pacific (APAC) region is anticipated to grow by 10.3% in 2024, according to a new report by Forrester, "The State Of The Software Market In Asia Pacific, 2023." Key investment areas identified are cloud, security, and IT finance management, aimed at enhancing IT performance.

For many firms, achieving peak performance in executing a software strategy remains problematic. According to Forrester data, APAC software decision-makers frequently cite budget constraints as an obstacle to executing their firms’ strategies and realising the expected business benefits. Other significant obstacles are categorised into business/IT alignment, technology capabilities, and organisational culture and talent.

In terms of business/IT alignment, 20% of software decision-makers in the region report that their software strategy execution suffers from a lack of alignment between IT and business. Additionally, 16% point to a lack of coordination between operations technology teams, 14% cite a lack of executive support, and 13% mention insufficient business unit alignment.

Regarding technology capabilities, 18% of decision-makers state that security challenges hinder their software strategy execution. 17% face issues related to the cost of replacing legacy systems, 15% are dealing with technical debt that diverts resources from innovation, and 13% grapple with the inflexibility of existing applications.

The organisational culture and talent category reveal further challenges. Among APAC software decision-makers, 18% indicate that inadequate user training adversely affects their software strategy execution. Additionally, 14% face an inflexible culture, and 13% report a lack of relevant internal skills as a barrier.

Software initiative focus varies across different countries within the APAC region, but artificial intelligence (AI) emerges as a common theme, underscoring its significance to strategic IT advances. CX (Customer Experience) also holds particular importance in countries like India and Australia. In these nations, CX is one of the top five departments that software decision-makers frequently cite as a focus for software strategy and investment.

Australia’s emphasis on CX is propelled by tech-savvy citizens and global business expectations, compelling firms to deliver exceptional customer experiences. For instance, Australian supermarket chain Woolworths has developed a smart interactive voice response system named Olive, powered by conversational AI. Olive can recognise more than 30,000 products and manage refunds and order updates without human intervention.

In Southeast Asia, there is a considerable focus on digital business. In Indonesia, the region's most populous nation, a majority of leaders cite digital business as the core of their company’s software strategy and investments. With one of the largest consumer markets, Indonesia has become a competitive arena for public cloud services as local and multinational firms vie for a share in its burgeoning e-commerce economy.

Frederic Giron, VP, senior research director at Forrester and lead author of the report, noted, "Software strategies play a key role in enabling enterprises in Asia Pacific to power high-performance IT. Despite challenges in aligning IT and business objectives, enterprises are prioritising revenue growth, customer expansion, and product development. AI is emerging as a key focus across a variety of software initiatives, highlighting its importance to strategic IT advances."