USD 215.1 billion
Software As A Service (SaaS) Market Size, Share, Growth Analysis, By Component(Software, Services), Deployment Mode, Enterprise-Size, Application(CRM, ERP, HCM, Content, Collaboration & Communication, Business Intelligence & Analytics, Others), Industry, and Region - Industry Forecast 2024-2031
Report ID:
SQMIG45B2028 |
Region:
Global |
Published Date: June, 2024
Pages:
157
|Tables:
96
|Figures:
76
Software as a Service (SaaS) Market Insights
Global Software as a Service (SaaS) Market size was valued at USD 261.15 billion in 2022 and is poised to grow from USD 296.93 billion in 2023 to USD 829.34 billion by 2031, growing at a CAGR of 13.7% during the forecast period (2024-2031).
SaaS is one of the cloud services that developed to help the users access applications over the internet. The steady and continuous adoption of public cloud services within enterprises are some reasons driving this market. The major push towards SaaS solutions’ adoption as the basis for companies’ ERP systems are found in the expenses linked to on-premises software models’ deployment. Nevertheless, issues related to data security and privacy that can exist in public cloud services can be considered as threats to market growth. The rise in the frequency of using emails, instant messaging apps, and video calls augments the need for smart devices, which in turns drives the SaaS market. Further, CRM SaaS solutions adoption is on the rise and cuts down on IT expenses and increases scalability within a firm. The ability to customize and configure CRM SaaS solutions is also becoming more straightforward and affordable, which means that current and prospective businesses can align their CRM systems to meet their unique requirements, including security. For instance, AppOmni in December 2022 entered into a partnership with Veeva Systems to bolster security for Veeva CRM and Veeva Vault. This partnership enables life sciences customers to leverage the features of AppOmni that can identify threats and manage configurations. Joint customers are able to use a set of measures aimed at the protection of sensitive data and compliance with the requirements set by the legislation by means of AppOmni’s integration with Veeva.
Cloud-based SaaS is a delivery model that involves accessing applications over the internet through the cloud. The software provider ensures they have the appropriate networking, servers, databases, and computing resources that permit the running of programs and data related to them. SaaS platforms are very similar to Application Service Providers and On-Demand Computing Software Delivery models in which the provider of the software hosts the client application and makes it available to specific end users through the Internet. SaaS completely frees businesses from the need to purchase and run software on the business’s PCs or data centers relieving them of the need to acquire the necessary hardware, configure, upgrade or maintain the software, get the license, install or support it.
It was also revealed that the COVID-19 outbreak has had a positive effect on the SaaS market as many businesses shifted to cloud software platforms during the periods of lockdowns. Lockdowns enforced by governments across the globe have accelerated corporate adoption of CSP, specifically SaaS, for various enterprises. Purpose-driven expansion of public cloud solutions for enabling remote business operations further promoted SaaS for managing enterprise activities remotely. As a result, the global shift in demand toward third-party software services during the pandemic contributed to a remarkable increase in market growth.
US SAAS Market is poised to grow at a sustainable CAGR for the next forecast year.
Market Snapshot - 2024-2031
Global Market Size
Largest Segment
Public cloud
Fastest Growth
Private cloud
Growth Rate
19.7% CAGR
Global Software As A Service (SaaS) Market ($ Bn)
Country Share for North America Region (%)
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Software as a Service (SaaS) Market Segmental Analysis
The global software as a service (SaaS) market is segmented by Component, Deployment Mode, Enterprise-size, Application, Industry, and region. Based on Component, the market is segmented into Software and Services. Based on Deployment Mode, the market is segmented into Public Cloud, Private Cloud, and Hybrid Cloud. Based on Enterprise Size, the market is segmented into Large Enterprises and Small & Medium Enterprises. Based on Application, the market is segmented into Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Human Capital Management, Content, Collaboration & Communication, BI & Analytics, and Others. Based on Industry, the market is segmented into Banking, Financial Services & Insurance (BFSI), Retail & Consumer Goods, Healthcare, Education, Manufacturing, Travel & Hospitality, and Others. Based on region, the market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America.
Analysis by Component
The software segment dominated the market in 2023 with over 84% of the total market share. The COVID-19 pandemic spurred a rapid adoption of remote working and flexibility in workplace arrangements, changing the expectations of stakeholders and forcing organizations to embrace SaaS technologies for telecommuting, collaboration and efficiency. Such solutions are project management, teleconferencing, and cloud computing solutions. Also, the interest in SaaS solutions is growing, especially the ones that use artificial intelligence to improve business processes and provide analytical data. Businesses keep on adopting digital transformation across verticals, and thus, focus on the efficient use of data for operational efficiency and customer/user understanding, which propels the demand for analytical SaaS solutions.
The services systems segment is expected to register the highest growth throughout the forecast period. There is an increasing focus on customer experience, security, and compliance in the trends of SaaS servicing. Customer support and self-service technologies including chatbots and online knowledge base are some areas where SaaS providers are putting a lot of emphasis as they strive to ensure that they offer the shortest possible response time to their customers. Also, SaaS providers are also adding more options that are more varied and flexible to cater for various companies’ needs as well as interlinking with other third-party solutions to give a good holistic user experience.
Analysis by Deployment Mode
In 2023, the private cloud segment held the largest revenue share, exceeding 43%. Integrating the network edge SaaS applications with the private cloud offers the organizations improved data sovereignty and security together with the performance and low latency advantages. Private cloud solutions are beneficial because they provide organizations with better control over the location of their data and help them adhere to regulatory requirements and avoid data breaches. In general, the integration of edge computing with private cloud guarantees the solidity of the platform for delivering SaaS applications for contemporary businesses.
The hybrid cloud segment is also expected to grow at a high CAGR during the forecast period. There is a growing trend in the development of industry-specific SaaS applications including healthcare, finance, and education industry SaaS applications since business entities require industry-specific features and must meet industry-specific regulatory requirements. The companies operating in these sectors demand SaaS that is tailored to their needs and the specificities of the sector, including hybrid cloud. For instance, in August 2021, Accenture signed Information Technology Outsourcing (ITO) deals with the Japanese equipment manufacturer Kubota to help advance the modernization of its legacy systems toward Microsoft Azure cloud or with the Chubu Electric Power Group to bolster its change. Also, Infosys inked a new deal in the multi-year Azure cloud modernization services with Ausgrid, an electricity distribution company from Australia.
Global Software As A Service (SaaS) Market Size By Deployment Mode
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Software as a Service (SaaS) Market Regional Insights
In 2023, North America is expected to lead the way with a market share of over 44% of the global market, especially with the U.S. The demand in the market and well-established market players are a significant force driving market growth in the region. Moreover, the availability of developed IT infrastructure also helps in the easy implementation of cloud-based virtual service that also boost North America’s large share in the global SaaS market. The prominent and secure internet servers of the region along with greater investment in cloud infrastructure also keep it in the forefront for the market.
The Asia-Pacific region is anticipated to show the highest CAGR during the forecast period. China and India have been leading this growth due to the expansion of outsourcing needs for cloud-based software and growing SMEs across the region. Due to increasing pressure from cost reduction on owning software installed within their premises, SMEs are outsourcing cloud-based software platforms. Furthermore, the profound increase in the IT sector in the region is expected to act as the major driver in the market expansion.
Global Software As A Service (SaaS) Market Size By Geography
- Largest
- Fastest
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Software as a Service (SaaS) Market Dynamics
Drivers
Growing Investment in Cloud Services by Major Players
- The adoption of cloud services by end-use businesses is likely to drive growth in the SaaS industry over the next few years. Some big market players are emphasizing the increase in their investment for a better product portfolio.Additionally, the increasing usage of software solutions like Edge computing, virtualization and containerization across various industries is also contributing to the adoption of SaaS services. This growing trend in the acceptance of new technologies is therefore opening several markets for industry players. AI like cloud computing or big data are other technologies that are also showing growth and are likely to further support the growth of the SaaS industry in the future.
Rising Demand for Smart Devices and their Applications
- The increased usage of e-mailing, instant messaging programs, and video calls has boosted the end user’s demand for smart devices and improving the software-as-a-service (SaaS) market. SaaS applications allow people to communicate from any location, in line with the tendency toward work from home that has been observedworldwide and should remain a strong driver for the development of the SaaS market in the future. Further, the growth in demand for business outsourcing among the corporations will lead to market expansion during the forecast period.
Restraints
Privacy Concerns Pose a Significant Hurdle for the Market
- Privacy concerns pose a significant hurdle for the market as users increasingly rely on cloud services to store sensitive business and personal information. Issues such as data loss, application vulnerabilities, data breaches, unforeseen emergencies, and cyberattacks on the internet are anticipated to hinder the market's growth. Security emerges as a paramount concern for many small and medium-sized businesses, underscored by notable incidents like the "colossal" ransomware attack in July 2021 that impacted nearly 1,500 businesses worldwide. The affected entities, primarily comprising dental clinics, automobile, libraries, and stores, highlight the vulnerability of organizations of various sizes to such cyber threats.
Lack of Security for Sensitive Data
- The absence of security measures for various data types remains a prime concern that threatens to slow down market expansion even as the utilization of SaaS applications grows, including for the storage of business-critical and personal information. Security is now one of the most important priorities for companies and organizations; for many enterprises in the industry, SaaS misconfigurations are seen as a major problem. Furthermore, configuring internal application setups can be a difficult proposition for the security teams with several applications and services getting compromised and data leakage happens along with exposing application programming interfaces, which in turn means unauthorized access to sensitive data. Two, the principal cause of these misconfigurations is the absence of understanding of the modifications in security settings; the SaaS solutions are used by several departments.
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Software as a Service (SaaS) Market Competitive Landscape
The global market for SaaS is competitive, with the leading players fighting for the largest market share. By using such resources, these companies ensure that they have a strong foundation to base their operations on and that their product offering is diverse to ensure they retain their competitive advantage. Third, there are many emerging players and start-ups entering the market, which brings some new solutions and changes the situation in the market. Strategic partnerships, associations, and acquisitions are regarded as major business models for companies to increase their market share and the range of their services.
SAAS Market Top Players Company Profiles
- Adobe Inc. (USA)
- Microsoft (USA)
- Alibaba Cloud (China)
- IBM (USA)
- Google LLC (USA)
- Salesforce.com, Inc. (USA)
- Oracle (USA)
- SAP SE (Germany)
- Rackspace Technology, Inc. (USA)
- VMware Inc. (USA)
- IONOS Cloud Inc. (Germany)
- Cisco Systems, Inc. (USA)
- Adaptavist (UK)
- ServiceNow (USA)
- Amazon Web Services (AWS) (US)
- Tencent Cloud (China)
- Hewlett Packard Enterprise (HPE) (USA)
- DigitalOcean (USA)
- Equinix (USA)
- OVHcloud (France)
SAAS Market Recent Developments
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In April 2023, Taclia, unveiled a groundbreaking solution aimed at digitizing everyday management processes. This innovative approach is set to streamline and modernize various operational aspects for businesses. To fuel the development and expansion of its solution, Taclia has successfully secured a significant investment of USD 6.7 million. This funding injection will enable the company to accelerate the scaling of its solution, further enhancing its capabilities and market reach.
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In January 2023, Revionics, partnership with Google Cloud, developed a data-driven pricing platform leveraging BigQuery, Looker, and other cutting-edge tools to enhance speed, scalability, and automation.
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In November 2022, Alibaba Cloud unveiled the ModelScope Platform along with innovative solutions, with the aim of making business innovation more accessible and achievable. This initiative is designed to lower the barriers that companies face when trying to bring their innovative ideas to life. By providing advanced tools and resources, Alibaba Cloud is empowering businesses to materialize their innovative concepts more efficiently and effectively.
Software as a Service (SaaS) Key Market Trends
- Increasing Demand for Comprehensive Solutions: The growth in the market space is due to the increasing need for an all-encompassing software application for businesses that are facing an array of problems. Today, companies implement SaaS Platform software solutions, which unite various applications, such as customer relationship management (CRM), business intelligence, supply management, and e-Commerce systems. All these solutions can be made as per the requirement of the business where they can be used across a corporate network on different cloud technologies. With the growth of businesses, there is a need to get business-oriented SaaS platforms that suit their official policies, regulations, and procedures. As the usage of mobiles gets escalated in work environments these applications help the employees to attain a higher productivity level. Furthermore, they facilitate interaction, support organizational improvement, and help determine a new market with a potential for capturing value.
Software as a Service (SaaS) Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyzes the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to our analysis, the worldwide SaaS market is continuing its constant growth, which can be explained by the growing demand in various spheres. SaaS enables companies to implement rather simple and cheap models of software application usage based primarily on internet connection without the necessity to implement and build specialized systems. Some of the driving forces behind increased demand for the market include increasing working from home trend, increasing demand for cloud services, and the need for cost-effective and flexible software. Key market players are directing significant focus towards research & development and large product portfolio to address satisfaction of new market requirements. Furthermore, new partnerships and collaborations with technology companies from other industries make the overall market grow, as well as improving the capabilities and increasing the popularity of SaaS providers’ products.
| Report Metric | Details |
|---|---|
| Market size value in 2022 | USD 261.15 billion |
| Market size value in 2031 | USD 829.34 billion |
| Growth Rate | 13.7% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Software as a Service (SaaS) Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Software as a Service (SaaS) Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Software as a Service (SaaS) Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Software as a Service (SaaS) Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Software as a Service (SaaS) Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Software as a Service (SaaS) Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Software as a Service (SaaS) Market Report Snapshots
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