Software Testing Market Size - Canada

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Software testing market size - Canada

Though the size of the market for software testing in Canada is not readily available, we were able to find information that allowed us to estimate it. Our computations reveal that the size could be in the vicinity of CAD 1.404 billion. Below you will see how we arrived at this rough estimate.

SIZE OF the GLOBAL SOFTWARE TESTING MARKET

There are several publicly available estimates of the size of the global market for software testing. Analyst firm NelsonHall, market research firm Technavio, and consulting, technology, and outsourcing service provider Capgemini have all provided estimates, which you may see below.

NelsonHall
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This analyst firm projected that the global market for software testing will reach USD 34 billion by 2017.

Technavio
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This market research firm projected that the global market for software testing will grow from USD 32 billion in 2016 to USD 55.3 billion by 2021 at a CAGR of over 14%. According to this firm, in 2016, application testing accounted for 76.25% of the global software testing market, while product testing accounted for 23.75%.

Capgemini
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An article published by Capgemini indicates that the global software testing market is a USD 40-billion market. According to this article, 40% of this market is accounted for by specialized testing, while 60% is accounted for by traditional testing. In the article, specialized testing was defined as testing performed by independent testers, while traditional testing was defined as testing that is inherent in the software development lifecycle.

Given that NelsonHall and Technavio's estimates are close to each other, we can safely assume that the global software testing market is around USD 34 billion.

SIZE OF the united states SOFTWARE TESTING MARKET

The current size of the market for software testing services in the United States is USD 4 billion, as estimated by market research firm IBISWorld. According to the firm, the market grew at an annual growth rate of 2.3% during the period 2012-2017, and there are 22,281 employees and 2,017 businesses in the market.

This market size seems too small, though, if North America's share of the global software testing market is considered. Based on the following information, it appears the region's share is over 40%.

1. Transparency Market Research estimated the global test automation market size in 2016 at USD 30.45 billion. It also projected that the size of the market for test automation in North America will be USD 15.99 billion in 2017. According to the firm, North America will remain as the region with the largest share of the market.

As you mentioned, test automation is one of the segments of software testing.

2. Zion Market Research, on the other hand, estimated that North America accounted for 44% of the USD 15.8-billion global test automation market in 2016. It estimated that, in that year, the size of the North American market was USD 6.84 billion. Similar to Transparency Market Research, it forecasted that the region will remain the market leader.

3. Persistence Market Research projected that North America will "dominate" the global market for software testing.

4. SQS, a key player in the global pure-play software testing services market, reported through its investor presentation that North America accounted for 47% of the world market for software testing services in 2014.

If we assume that North America's current share of the global software testing market is still around 47%, then the size of the North American market for software testing must be around USD 15.98 billion or 47% of the USD 34-billion global software testing market. It follows too that the United States market for software testing must be far greater than IBISWorld's estimate of USD 4 billion.

Size of the Canadian software TESTING MARKET

Since we could not find any Canada-specific information among pages and files published in the past two years, we expanded our search to include older sources. We found one helpful report, IDC's 2011 report on the Canadian market for "discrete enterprise application testing services." As can be seen in the report, IDC's projections regarding the size of this market were as follows:

2010 — USD 253 million
2011 — USD 305 million
2012 — USD 370 million
2013 — USD 453 million
2014 — USD 558 million
2015 — USD 683 million

IDC forecasted that the CAGR during the period 2010-2015 will be 22%. If we assume that the CAGR in the years following 2015 will still be around 22%, we can roughly estimate the following market sizes:

2016 — USD 833 million (or USD 683 million x 1.22)
2017 — USD 1,016 million (or USD 833 million x 1.22)

Though these market sizes pertain to the "discrete enterprise application testing services" market only, they are indicative of how large the Canadian software testing market is. Globally, discrete testing services account for 94% of the USD 34-billion software testing market. NelsonHall projected that global spending on discrete testing services will reach USD 32.103 billion by 2017.

If we assume that discrete testing services account for 94% of the Canadian software testing market as well, we can estimate the size of the Canadian software testing market at USD 1,081 million or CAD 1,404 million (if an average exchange rate of USD 1 = CAD 1.2986 is used).

USD 1,016 million / 0.94 = USD 1,081 million or CAD 1,404 million

CONCLUSION

While there is no publicly accessible source that directly answers your question, we found a few reports and articles that provided enough information for us to triangulate the answer. Based on our calculations, it is possible that the size of the software testing market in Canada is not far from CAD 1.404 billion.
Sources
Sources