The enterprise software market will transform, driven by the rapid adoption of artificial intelligence — especially agentic AI — and the global acceleration toward cloud-first strategies.
According to IDC's latest market study, spending on agentic AI will account for more than 26 percent of worldwide IT investment by 2029, exceeding $1.3 trillion, and reshaping the core priorities and technologies fueling digital growth.
Enterprise Software Market Development
Recent IDC research projects that worldwide enterprise applications revenue will surpass $600 billion by 2028, up from $356 billion in 2023 — a clear sign of double-digit momentum in this sector.
The enterprise applications market, including functional areas such as enterprise resource management (ERM), customer relationship management (CRM), supply chain management (SCM), and production or engineering applications, delivered 12 percent year-over-year revenue growth in 2023.
Equally notable, public cloud is forecasted to dominate deployment models, accounting for over 70 percent of new spending in 2028, and driving a five-year CAGR of 16.5 percent for public cloud-based enterprise applications — well above the 11.1 percent CAGR projected for the overall market.
The Rise of Agentic AI Investments
Agentic AI is reshaping how organizations allocate IT budgets and prioritize innovation. By 2029, agentic AI spending will reach over a quarter of all global IT investment — reflecting how embedded intelligence, automation, and data-driven decision-making are becoming critical.
The infusion of traditional AI, machine learning, and Generative AI (GenAI) into workflows enables businesses to realize faster insights and smarter decision-making.
Savvy employees are already beginning to leverage enterprise AI tools as a digital coworker that helps solve business problems and supports rapid change.
Key Trends Shaping the Enterprise Software Market
- The mass migration to cloud computing has transformed software accessibility, scalability, and cost management. Public cloud is now the foundational deployment choice, enabling organizations to rapidly implement, innovate, and maintain applications.
- AI observability and AIOps are maturing beyond basic automation and noise reduction, evolving toward systems with intelligent agents that can proactively diagnose issues, optimize workflows, and drive customer experience transformation.
- As more businesses digitize, there is accelerated investment in keeping application portfolios current. This means continuous updating of software, integrating new AI features, and ensuring interoperability between critical business systems.
- Leading enterprise software vendors are growing through organic expansion and acquisitions, solidifying their market footprints and fueling intense competition around innovation, value creation, and differentiation.
Enterprise Software Market Growth Opportunities
Companies that integrate AI and GenAI deeply into their business processes will see exponential improvements in operational efficiency, customer insights, and adaptability.
Industry-specific use cases and Applied-AI empowered applications will drive demand for tailored enterprise tools that maximize data utility and improve user experience.
Sustainability trends and regulatory support in emerging economies are contributing further to market expansion, as organizations invest in compliance for broader social impact.
For technology vendors, short-term project wins and strategic partnerships are essential to earning trust as organizations navigate the transition to multi-agent, AI-augmented tools.
Outlook for Enterprise Software Apps Innovation
The integration of advanced intelligence throughout the stack will be essential for organizations seeking predictive insight, automation, and a competitive edge in a volatile digital marketplace.
For technology leaders, the challenge — and the opportunity — lies in maximizing AI capabilities, modernizing portfolios with cloud-native technologies, and forging strategic partnerships to deliver lasting business transformation.
"An important takeaway from this forecast is the clear alignment between the growth in (AI) spending and IT leaders’ trust that effective use of AI can boost future business success," said Rick Villars, group vice president at IDC.
That being said, I believe this is a compelling opportunity for executives to re-evaluate their IT investment strategy and embrace the advances that will define success in the years ahead.