Wolters Kluwer’s Capego Practice Management: A Disruptive Cloud Play in the Tax & Accounting Sector

The professional services software landscape is undergoing a seismic shift, driven by cloud adoption and AI integration. Wolters Kluwer’s Capego Practice Management stands at the forefront of this transformation, offering a cloud-native platform tailored to the evolving needs of tax and accounting firms. With the global cloud accounting software market projected to grow at a 7.8% CAGR through 2032 [4], Capego’s strategic positioning aligns with a structural trend that is redefining operational efficiency and client engagement in the sector.

Wolters Kluwer’s 2024 financial results underscore the company’s cloud-driven momentum. Total revenues reached €5.9 billion, with cloud software contributing 19% of total revenues and growing 16% organically [5]. This outpaces the broader market’s 6% CAGR, reflecting the company’s ability to monetize its digital transformation. The Tax & Accounting division, which includes Capego, demonstrated resilience despite macroeconomic headwinds, with expert solutions accounting for 59% of total revenues and growing 7% organically [5]. These figures highlight Wolters Kluwer’s pivot from traditional information products to integrated software-as-a-service (SaaS) offerings.

Capego Practice Management itself is a testament to this strategy. Launched as a cloud-native solution, it consolidates client collaboration, task management, invoicing, and compliance into a single platform [1]. A 2024 Wolters Kluwer survey revealed that 71% of cloud-based accounting firms reported improved profitability in 2023 compared to 55% of non-cloud firms [2]. This correlation between cloud adoption and financial performance is not coincidental. Cloud platforms like Capego enable real-time data access, automated workflows, and scalable infrastructure, which are critical for firms navigating regulatory complexity and client demands for transparency.

The market’s response to cloud disruption is equally compelling. The U.S. accounting practice management software market is expected to expand from $0.8 billion in 2024 to $0.89 billion in 2025 at a 11.3% CAGR [3]. Capego’s modular design and AI-powered tools—such as CCH AnswerConnect’s 40% increase in AI-driven tax research usage [5]—position it to capture a significant share of this growth. Furthermore, Wolters Kluwer’s 2025-2027 strategy emphasizes scaling expert solutions and accelerating innovation, with a focus on generative AI to reduce compliance risk and shift tax professionals toward strategic advisory roles [5].

However, challenges persist. Only 25% of firms report leveraging 75% of their cloud tools’ value, and pricing pressures remain a concern [2]. Yet, Wolters Kluwer’s recurring revenue model—82% of total revenues in 2024 [5]—mitigates these risks by ensuring long-term client retention. The company’s 16.8% return on invested capital (ROIC) in 2023 [1] further validates its capital allocation discipline, a critical factor for sustaining growth in a competitive market.

For investors, Capego Practice Management represents more than a product—it is a strategic lever for Wolters Kluwer’s long-term value creation. By aligning with the cloud-first trajectory of the tax and accounting sector, the company is not only capturing incremental revenue but also redefining industry standards. As AI and automation become table stakes, Wolters Kluwer’s ability to integrate these technologies into its cloud ecosystem will determine its dominance in a market poised for sustained expansion.

Source:
[1] Wolters Kluwer 2023 Full-Year Report, [https://www.wolterskluwer.com/en/news/wolters-kluwer-2023-full-year-report]
[2] Wolters Kluwer survey shows accounting firms using cloud-based technology experience higher growth, [https://www.wolterskluwer.com/en/news/wolters-kluwer-survey-shows-accounting-firms-using-cloud-based-technology-experience-higher-growth]
[3] Accounting Practice Management Software Market Report, [https://www.thebusinessresearchcompany.com/report/accounting-practice-management-software-global-market-report]
[4] Cloud Accounting Software Market Size, Share - 2032, [https://www.alliedmarketresearch.com/cloud-accounting-software-market-A274725]
[5] Wolters Kluwer 2024 Full-Year Report, [https://live.euronext.com/en/products/equities/company-news/2025-02-26-wolters-kluwer-2024-full-year-report]