Software Testing Services in the US Industry Market Research Report Now Available from IBISWorld

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This industry managed to weather the recession with minimal losses and should experience stronger growth over the next five years. For these reasons, industry research firm IBISWorld has added a report on the Software Testing Services industry to its growing industry report collection.

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India is taking over much of the industry, and should account for more than half by 2020.

The Software Testing Services industry has exited from an uneven recession and recovery to post a 1.0% annualized growth rate in the five years to 2013. Demand for software testing services ultimately derives from total demand for software, as testing is an integral part of the development process. As a result, revenue from software testing dipped in 2009 in response to the 4.1% drop in private investment in computers and software. But the recovery of business demand for software in the years since has brought steady growth to the industry, with additional 3.4% growth expected in 2013 to bring the market size to $3.1 billion.

While the global software testing industry is in the midst of rapid growth, most of this growth has been localized in India, to the detriment of domestic firms. India is expected to account for more than half of the global testing industry by 2020, according to Nasscom, an Indian software industry association. The growing popularity of cloud-based testing has aided the rise in overseas testing firms. “Cloud-based testing provides a low-cost alternative to traditional software testing, which required the software to be installed on every testing workstation,” says IBISWorld industry analyst Dale Schmidt. Instead, the software is only installed on a central server, and then run remotely from testing workstations around the world. As a result, geographic location of a testing firm has become much less important. In addition, testing firms can become better integrated into all parts of the software development process, as changes and improvements can be quickly implemented into the master program.

The software testing industry will experience moderate growth over the next five years. Continued growth in business demand for software, in addition to the last steps of market acceptance of outsourced testing services, will drive growth. Like recent growth, though, most of the growing demand for outsourced testing services will be absorbed by foreign companies, particularly in India. The Software Testing Services industry, which is highly fragmented and competitive, exhibits a low level of market share concentration. According to Schmidt, as companies continue to expand their online presence and develop applications to serve consumer and business interests, the need for software testing services is growing. Attracted by these opportunities, more companies are tapping into the software testing industry. This trend will continue over the next five years, with the number of enterprises expected to increase slowly. For more information, visit IBISWorld’s Software Testing Services in the US industry report page.

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IBISWorld industry Report Key Topics

This industry provides software testing services for clients, such as performance testing, stability testing, usability testing and security testing. This industry does not sell its own software, but it may use internally developed software to complete its testing tasks.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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