The emergence of cloud computing unlocked a new wave of growth for the software industry as previously siloed data became available across applications, further enhancing efficiency and enabling a wave of new applications. Software as a Service and cloud-enabled software revenues are expanding at a 20% CAGR compared to 9.7% for software overall. Yet, after 25 years, just over 40% of enterprise software applications run in the cloud today. A recent survey Chief Information Officer (CIO) survey conducted by Morgan Stanley suggests nearly 60% of software will run on cloud-delivered environments by the end of 2027. As we discuss in our recent note, Innovation remains the engine of growth, artificial intelligence is poised to enhance software capabilities and drive new opportunities for developers.
Source: Morgan Stanley, April 2025