AI acceleration. Fragmented markets. Selective buyers. Scalable platforms.
Custom software development has evolved from isolated, in-house systems to globally distributed, AI-enabled digital engineering platforms. As enterprises accelerate digital transformation and AI adoption, demand for outsourced custom software development (OCSD) continues to expand, even as M&A markets become more selective.
Equiteq’s Outsourced Custom Software Development M&A Report 2026 provides a comprehensive analysis of global market growth, deal activity, buyer behaviour, and regional dynamics, with particular insight into North America, Western Europe, and Central & Eastern Europe (CEE).
Key Findings
- 600+ custom software development transactions completed since 2021
- Global OCSD market forecast to grow at ~23% CAGR through 2030
- Global IT spend expected to reach $6.1 trillion in 2026, up ~10% year-on-year
- AI spending set to double in 2026 vs 2024, driving demand for bespoke development
- 76% of firms employ fewer than 50 people, highlighting a highly fragmented landscape
- North America and Western Europe account for ~80% of global deal volume
- Buyers increasingly prioritising AI capability, delivery scale, and platform integration
Market Overview
The outsourced custom software development market is being reshaped by three structural forces:
1. AI and Automation
AI software is now the fastest-growing segment of IT investment. Enterprises are investing heavily in bespoke AI applications, automation frameworks, and data-enabled solutions — increasing reliance on specialist development partners.
2. Talent Shortages
98% of executives report IT talent shortages impacting technology delivery. As internal capacity constraints persist, outsourcing and nearshoring continue to expand.
3. Digital Infrastructure Investment
Data centre systems and AI infrastructure are driving IT budget growth globally. Cloud platforms, cybersecurity, and intelligent applications remain central to enterprise strategy.
M&A Activity and Buyer Priorities
While macroeconomic headwinds have softened overall deal volumes since 2023, high-quality custom software development assets continue to attract strong interest from both strategic and private equity buyers.
Recent transactions show buyers prioritising:
- Enhanced delivery capabilities
- Scalable nearshore and offshore platforms
- AI-native and data engineering expertise
- Vertical-specific and complex modernisation capabilities
Add-on acquisitions remain highly active as PE-backed platforms consolidate fragmented markets, while strategic buyers seek capability-led expansion.
Premium valuations continue for differentiated, high-quality assets with strong technical depth and stable recurring revenues.
Regional Spotlight: Central & Eastern Europe (CEE)
CEE remains a highly active and strategically important region for outsourced software development.
- 102m population (23% of EU)
- Structurally competitive IT wage levels
- Strong nearshoring demand from Western Europe
- 80+ regional transactions since 2021
- Poland the most active M&A market in the region
Local consolidators and foreign buyers continue to invest in scalable CEE platforms, reinforcing the region’s importance in global software delivery.
What’s Inside the Report
- Global OCSD market size and growth forecasts to 2030
- IT spend and AI investment trends shaping demand
- 600+ M&A transactions analysed (2021–2025)
- Buyer mix: trade vs PE vs add-ons
- Regional breakdown: North America, Western Europe, CEE, Asia Pacific
- Valuation dynamics and buyer selectivity trends
- Strategic outlook for 2026 and beyond
Who Should Read This?
- Private equity investors building digital engineering platforms
- Strategic acquirers expanding software delivery capabilities
- PE-backed custom software development businesses
- Founder-led engineering and digital services firms preparing for scale or exit
Download the Outsourced Custom Software Development M&A Report 2026 to understand where growth is accelerating, what buyers are prioritising, and how the next phase of consolidation in digital engineering is unfolding.