Forrester's new report 'Global Commercial Software Forecast, 2025 to 2029' reveals that cloud and AI will drive infrastructure software growth, reaching a 13.3% CAGR from 2025 to 2029. Meanwhile, application software is expected to see slower growth of 9.5%.
Software growth
The report finds that software continues to experience double-digit growth rates, despite the geopolitical tensions associated with tariffs, with the average software vendor revenue growth in Q1 2025 at 11%.
Forrester projects that the next five years will see security, databases, and AI platforms dominate growth in software infrastructure. Moreover, application software areas such as tech operations management, ERP, vertical software, and supply chain management will lead their respective categories.
Highlights
The report also predicts that cybersecurity will see the fastest growth, with investments in cloud security and identity management leading to a 14.3% CAGR.
Moreover,companies like MongoDB (+50% revenue growth in two years) and Snowflake (+75% revenue growth from 2022 to 2024) are expected to boost the database software market.
Meanwhile, AI agent orchestration tools will drive the growth of tech operations management at a 12.3% rate, leading to the evolution of application software.
Linda Ivy-Rosser, VP research director of Forrester, said: "Software firms are being reshaped by economic pressures and advancements in AI. While infrastructure growth is accelerating, businesses must rethink strategies to optimise resources, adopt agentic AI solutions, and better manage software spend. Companies that align their priorities with evolving market trends will secure competitive advantages well into the next decade."
