Software Composition Analysis Market Overview

Software Composition Analysis (SCA) market size is estimated to reach $462.8 million by 2026 at a CAGR of 12.4% during the forecast period 2021-2026 owing to the increasing dependency on open source software (OSS), growing penetration of IoT and cloud based services across various industries. SCA offers automating visibility to the OSS, in order to provide security risk management, license compliance, security and other management services against various threats including open source vulnerabilities, making it a more secure and popular solution among the enterprises. Apart from that, increasing cyber-attacks, growing adoption of financial technologies in e-commerce and BFSI sectors are few of the main drivers of Software Composition Analysis market. In May 2019, three banks, Dutch Bangla Bank Limited, NCC bank and Prime Bank suffered a major cyber-attack. Beside this, stringent government regulations are a major growth factor to consider for this market. Hence, the above-mentioned factors will drive the Software Composition Analysis industry growth in the forecast period 2021-2026.

Software Composition Analysis Market Report Coverage

The report: “Software Composition Analysis Market – Forecast (2021-2026)”, by IndustryARC covers an in-depth analysis of the following segments of the Software Composition Analysis market

By offering type: solutions and services.
By solutions: License compliance management, Vulnerability management, policy management, security management, quality management, operational risk management, auto remediation and others.
By services: consulting, security, support, maintenance, training and others
By deployment: On-premise, Cloud.
By Organization Size: small and medium enterprises, large enterprises.
By end user industry: BFSI, IT & Telecom, Retail and E-commerce, Healthcare, General Manufacturing, Education, government and others.
By Geography: North America (U.S, Canada, Mexico), Europe (Germany, UK, France, Italy, Spain, Russia and Others), APAC (Japan, China, India, South Korea, Australia and Others), South America (Brazil, Argentina and others) and RoW (Middle east and Africa)

Key Takeaways

• North America dominated the SCA market with a market share of more than 35% in 2020, early adoption of advanced technologies and growing usage of digital payment methods are the key factors, boosting the market growth.
• The major driving factor behind the growth of software composition analysis market during the forecast sector 2021-2026, are rising open source vulnerabilities and growth of FinTech sector.

Software Composition Analysis Market Value Share, by Geography, 2020 (%)

Software Composition Analysis Market Segment Analysis – By Deployment

Based on deployment, Software Composition Analysis market is segmented into on-premise and cloud-based deployment. According to the Software Composition Analysis market report of IndustryARC, Cloud-based deployment of SCA technology held the major share of the market and is estimated to grow with a CAGR of 14.6% during 2021-2026, owing to the digital transformation and technological advancements across the world. In February 2020, Microsoft announced their $1.1 billion investment plan to drive the digital transformation in Mexico over next five years. In addition, it also offers several benefits such as reduction in operational and infrastructural cost, simple deployment process, better scalability, greater availability compared to on-premise based SCA. Apart from that, companies investing and launching cloud-based SCA products, are fuelling the demand for it. In June 2020, Checkmarx announced its new SaaS-based SCA solution, CheckMarx SCA (CxSCA), which take leverage from Checkmarx’s source code analysis along with its automation capabilities to empower the security and development teams for the identification of vulnerabilities within the OSS, that reduces the risk and increases the productivity of the developers. Increased investments along with such launches will provide significant opportunities for cloud-based deployment of software composition analysis solutions in the forecast period 2021-2026.

Software Composition Analysis Market Segment Analysis – End-User Industry

The SCA market is segmented into BFSI, IT & Telecom, Retail and E-commerce, Healthcare, General Manufacturing, Education, government and others, on the basis of end-user industry. Retail and e-commerce sector is anticipated to grow with the fastest CAGR of 12.4% during the forecast period 2021-2026. Consumers’ growing preference towards digital payment methods over the traditional ways and the growing popularity of advanced money transactional methods such as NEFT, ECS, RTGS, digital wallets, mobile payments and others, are the key factors driving the growth of SCA market. Apart from that, due to the current situation of Covid-19, e-commerce sector has experienced a huge amount of global growth. According to the report, The 2021 Global Payments by Worldpay FIS, Indian e-commerce sector witnessed a massive amount of growth during the lockdown period, due to the pandemic. According to the same report, this growth is mainly driven by mobile shopping, which will grow 21% per annum over the next four years. Furthermore, the availability of different web-based, cloud-based, multi device supporting Open Source retail POS software plays a major role in the growth.

Software Composition Analysis Market Segment Analysis - By Geography

North America dominated the market in 2020 owing to the early adoption for new technologies, increasing use of digital banking solutions and increasing number of cyber-threats in this region. According to a FDIC’s biennial How America Banks report 2019, more than 34% American households reported that they used mobile as their primary method of accessing their bank accounts in 2019. Apart from that, government’s strict regulatory norms, increasing online transaction for e-commerce sector and presence of key market players in region are fuelling the market growth. Furthermore, APAC is anticipated to witness fastest growth rate during the forecast period 2021-2026 owing to the growing penetration of IoT based services and increasing smart-phone penetration. According to a joint report published by Indian Cellular and Electronics Association and KPMG, India will have 820M smartphone user by the year 2022. Apart from that, rising investment in e-commerce sector also plays a crucial role in the growth of this market. In April 2020, Facebook invested $6 billion in Indian e-commerce Giant, the Reliance Industry. Hence, the above mentioned factors are analysed to drive the market in the forecast period 2021-2026.

Software Composition Analysis Market Drivers

Increasing Threats of Open Source Software offers benefits of integration, an expansive array of components

With the increasing usage of open source codes, the number of open source vulnerabilities as well as threats is rising, and to overcome the threats successfully, the adoption of software composition analysis is also increasing. Open source software (OSS) has its fair share of benefits such as ease of integration, expansive array of components, zero cost and others as well as vulnerabilities such as OSS license compliance risk, OSS security risks, OSS quality risk and others. These open source vulnerabilities are an extremely rewarding opportunity for the hackers. According to Sonatype’s sixth annual state of the software supply chain report published on August 2020, there is a 430% rise in next generation attacks targeting vulnerabilities of open source components directly in order to infect software supply chains. This type of vulnerabilities can be avoided by the deployment of software composition analysis which is affecting the adoption rate of SCA positively. Hence the above mentioned factor is set to drive the market during the forecast period 2021-2026.

Growing FinTech Sector across the World increase the SCA at a higher pace

Growing focus on Financial Technologies (FinTech) coupled with increasing adoption of IoT based services act as a major driver for this market. According to a report of Invest India, India has the fastest FinTech adoption rate globally of 87% which is significantly higher than the global average FinTech adoption rate of 64%. In addition, the report says that the Indian FinTech market is anticipated to grow from approximately $65 billion in 2019 to $140 billion in 2023. With the increasing use of digital banking, mobile banking, Electronic Clearing Service (ECS), National Electronic Fund Transfer (NEFT), Real-time Gross Settlement Systems (RTGS) and others, the financial data security threats are increasing. In June 2020, FBI published a report on Internet Crime Complaint Center (IC3), according to which 75% Americans used different banking apps last year and the numbers had increased by 8% in just two months. In January 2020, 15,000 credit and debit cards were cancelled by Alpha Bank, Piraeus Bank, Eurobank and the National Bank of Greece after a tourist service portal was hacked. SCA solutions and services offer enhanced security and safe transaction facilities against these types of threats which is a growth boosting factor for this market. Hence the increasing adoption of FinTech is analyzed to drive the market in the forecast period 2021-2026.

Software Composition Analysis Market Challenges

Software Composition Analysis is a major concern for small and medium enterprises:

Although Software Composition Analysis market is growing at a rapid phase, the high initial cost of the technology is estimated to hinder the market growth. The high initial investment of Software Composition Analysis is a major concern for small and medium enterprises with budgetary constraints. Hence the high initial investment hinders the market growth in the forecast period 2021-2026.

Software Composition Analysis Market Landscape

Technology launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Software Composition Analysis market. In 2020, the market of Software Composition Analysis industry outlook has been fragmented by several companies. Software Composition Analysis top 10 companies include

• Synopsys, Inc.
• Sonatype, Inc.
• Veracode, Inc.
• WhiteHat Security, Inc.
• WhiteSource Software, Inc.
• Contrast Security, Inc.
• Black Duck Software, Inc.
• NexB, Inc.
• SourceClear, Inc.
• Flexera software, Inc.

Acquisitions/Technology Launches

• In April 2021, WhiteSource announced the acquisition of an open source malware security and threats detection solution, Diffend. After the acquisition, all the commercial offering of Differnd will be available for free, that too with a new name WhiteSource Diffend. By this acquisition, WhiteSource now can offer advanced platforms to mitigate the software supply chain risk.
• In November 2019, Renovate, an open source automated dependency update platform was acquired by WhiteSource. The company is planning to make the current commercial offerings of Renovate, available for free under its new name, WhiteSource Renovate.