SaaS (Global Market)

2023 Global SaaS Market Exceeds $236 Billion for the Year

In 2023, costs in the global SaaS (software as a service) market reached $236.1 billion. This industry is experiencing rapid growth, as stated in the Market Research Future review, published in early November 2024.

One of the key drivers of the market in question is the rapid adoption of artificial intelligence and machine learning technologies. These systems can significantly increase operational efficiency, reduce the burden on employees and automate the execution of routine tasks. AI-based platforms are becoming more important as they help companies extract valuable information from vast amounts of data and make more informed decisions.

The SaaS model eliminates the installation and configuration required for local software, which can significantly reduce costs and speed up the deployment of required services. SaaS providers are investing in rigorous cybersecurity protocols and disaster recovery features, with many operators of such platforms promising 99 percent and even 99.9 percent continuity. In addition, the SaaS architecture provides flexible scalability, allowing companies to grow resources as needed. This makes it possible to quickly adapt to changing market conditions or business needs.

At the same time, SaaS integration solutions can improve the efficiency of everyday tasks without developing functionality from scratch. SaaS applications are available for every use case and industry - from human resources and inventory management to customer support and data analytics. SaaS services also support remote work environments and mobile access

Analysts divide the SaaS service market into four main types: public, public, private and hybrid clouds. It is noted that a significant share in 2023 was occupied by private cloud systems. Deploying SaaS applications to the edge of the network, combined with private cloud infrastructure, improves data control, security, and performance while reducing latency. This approach ensures compliance and reduces the risk of confidential information leaking. Large enterprises provide the main share of revenue. The industry segmentation plan highlights areas such as retail, IT and telecommunications, entertainment, BFSI (banking, financial services and insurance), healthcare and manufacturing. Of these, the direction of BFSI dominates on a global scale: cloud banking solutions are gaining popularity due to their flexibility and scalability. Regionally, North America leads with leading cloud service providers. Among the key players in the global SaaS industry are:

• Salesforce;
• Zuora;
• LinkedIn;
• Microsoft;
• Concur Technologies;
• Medidata Solutions;
• Workday;
• Oracle;
• IBM;
• NetSuite;
• ServiceNow;
• Google.

At the end of 2024, revenue in the SaaS segment is estimated at $279.3 billion. Market Research Future analysts believe that in the future, the CAGR will be 18.3%. As a result, by 2032, costs on a global scale could increase to $1.27 trillion. It is noted that the industry has enormous potential due to the ongoing digital transformation, the transfer of workloads to the cloud and the rapid expansion of the AI sphere.^[1]

2021: Market growth by a third, to $145 billion

In 2021, the volume of the global SaaS market amounted to $145 billion, which is a third more than a year earlier. At the same time, in 2020, the growth rate of expenses for software provided as a service was significantly higher (+ 78%). Such data in March 2022 were cited by analysts at Paddle, which offers an infrastructure payment platform for SaaS projects.

Experts attribute a tangible decrease in the growth dynamics of the global Solutions SaaS market to the weakening of the influence of the COVID-19 coronavirus pandemic factor, which in 2020 pushed companies to a massive transition to remote work (because of this, the demand for cloud tools has greatly increased). Vendors began to adapt to the changed situation, offering new tools and models of price formation, as well as betting on the capabilities of products.

When the coronavirus hit, the world moved online in a way that no one could predict, and the SaaS industry reaped the benefits of it. Although the pandemic accelerated revenue growth for software developers in 2020, it was already different in 2021, says Paddle CEO Christian Owens. - As our report shows, the industry failed to maintain its growth rate in the first year of the pandemic, and we have seen a correction as we approach 2022. However, there are a few players who have changed that trend. They have a few things in common: product-focused growth strategies, a flexible approach to pricing and a global view of payments.

According to analysts, the fastest growing SaaS vendors in 2021 were those who revised their prices and experimented with dynamic models that assume payment for services as they are consumed. 40% of producers who regularly adjust their prices were able to increase annual revenue by 25% or more. However, most players in the market still do not have a pricing optimization strategy or do not even see it as a growth factor, according to a study published in March 2022.

It also says that 20% of the surveyed SaaS Solutions SaaS suppliers over the past five years have not changed prices for their products at all, and 30% of respondents have no plans to revise price lists.

It is noted that SaaS company accept payments in at least two currencies grew 13% faster in 2021 than those that use only one currency. Vendors operating with more than 25 currencies showed an increase of 25% higher compared to "single-currency" players. And companies offering at least one alternative for payments are growing 22% faster than competitors who do not have it.

Solutions SaaS suppliers that have abandoned the traditional business model that prioritizes sales are achieving better results, analysts said. Thus, manufacturers betting on the quality of their product increase revenue by 7% faster compared to competitors practicing other strategies. There are also signs that product-centric business growth is becoming the dominant model, with 79% of software sellers surveyed by Paddle saying they see themselves as primarily product-centric rather than sales-oriented.

Researchers consider the use of artificial intelligence in such solutions to be one of the growing trends in the SaaS market. Another trend is the popularization of SaaS in the mobile device market. In addition, analysts point to the expansion of the range of niche SaaS products focused on specific industries.^[2]

2020: Forrester names SaaS market leaders

In August 2020, the analytical company Forrester announced the results of a study of the global market software offered as a service (model). SaaS The report lists the largest providers of such solutions, and also describes the strengths and weaknesses of marketplaces that develop the companies mentioned.

The leaders of the SaaS market are two companies: Salesforce and (Amazon more precisely, its division/). Amazon Web ServicesAWS According to experts, Salesforce dominates due to its developed marketplace, which has a wide range of scalable SaaS products available. However, this site is highly focused on Salesforce customers who need add-ons for. ON

The study said AWS "continues to expand its capabilities in areas such as standard contract terms, negotiating individual contracts on its marketplace, and integrating with leading procurement tools such as Coupa."

At the same time, the company does not offer many business applications compared to competitors and is primarily interesting to AWS developers who like deeply integrated security settings.

According to experts, among Alibaba's Solutions SaaS, "any company can find the right one in terms of scalability and functionality. However, Alibaba is focused on the Chinese market, and only a small number of applications have an English version, and several products in the extended version are available only in the Middle Kingdom.

Alibaba is classified as a Strong Performers along with ServiceNow and Microsoft. The study also mentions companies that, according to analysts, claim leadership (Contenders): Google, ADP, Adobe.^[3]

2019: Sales of $101 billion - Synergy Research

The volume of the global SaaS market in 2019 amounted to $101 billion, having more than doubled in three years, according to the analytical company Synergy Research.

The fastest growing segments of the market in question are called solutions for collaboration and human resources management. What dynamics was in 2019 is not specified.

As for the leaders of the software market distributed as a service, Microsoft ranks first since 2016. In 2019, the share of the American corporation amounted to 17%. The top 5 largest manufacturers are as follows:

• Microsoft (17%);
• Salesforce (12%);
• Adobe (12%);
• SAP (6%);
• Oracle (6%). 

The study notes that the leading group has practically not changed compared to 2018, and the leading Microsoft and Salesforce have increased their shares by only half a percentage point over the year.

At the same time, if the largest vendors show slightly high growth rates, then smaller players are growing much faster. Among them are Dassault Systemes, Atlassian, VMware and ServiceNow.

Growing demand for collaboration technology has helped Microsoft, Cisco and IBM strengthen their position in the SaaS market. And HR software has helped improve the financial performance of Workday, Intuit and ADP. According to experts, ERP (enterprise resource planning) systems are among the largest segments of the entire corporate software market, but the corresponding SaaS category is still poorly developed.

Over the past 10 years, the purchase of SaaS versions of software has become increasingly attractive to companies due to significant improvements in hosting capabilities, a more flexible economy and increased comfort in switching to a cloud operating model, says Synergy Research Group lead analyst John Dinsdale. - Entry into the market of new cloud providers also provided significant growth in the SaaS market. At first, Salesforce was the undisputed leader in the SaaS segment, but over the past ten years we have watched a number of other Developer SaaS the market, including Workday,, Zendesk ServiceNow, Atlassian,,,, and Splunk Cloudera. Carbonite These Tableau new players forced traditional software developers to promote SaaS more than they could do without such pressure. "

According to the analyst, the purchase of software in the service format is becoming more and more attractive for business due to significant improvements in hosting capabilities, a more flexible economy and increased comfort when switching to a cloud operating model. Since the cost of cloud software is still significantly less than the cost of enterprises for software used locally, Synergy Research expects further growth in the SaaS industry over the years, in all regions and in all areas.

In 2019, the volume of the global corporate software market reached $450 billion, of which the SaaS segment accounted for 23%. In 2019, this share was 2%. If the demand for cloud software is growing rapidly, then sales of local products (installed on client computers) over the past 10 years have increased only by an average of 4% annually, experts said in March 2020.

Although the other two segments of the cloud services market - IaaS (Infrastructure as a Service, Infrastructure as a Service) and PaaS (Platform As A Service, Business Platform as a Service) - are developing more dynamically, SaaS significantly exceeds them in volume, and this advantage will continue in the foreseeable future, analysts are sure.^[4]

2016: Forrester Data

2015: Forrester Forecast and Data

2012

US holds 60% of global SaaS market

The United States is the world leader in the SaaS (Software-as-a-Service) market, which accounts for about 60% of the segment, the analytical agency PAC came to such conclusions.

"The US is the undisputed leader - the business model was invented there, the choice of services is very wide and there are no obstacles to development. However, other countries are afraid of losing control over their data, they are concerned about security issues, as well as the lack of competition from independent developers ON- all this significantly hinders the development of the market, "says chief analyst PAC Christophe Chalon.

According to the study, the second place is shared by Great Britain and Germany - 6% each, followed by Japan and Canada - 4% each, France - 3%. All other countries where SaaS is provided share 17% of this market.

According to the data, PAC the main consumers SaaS are production segments and consumer services. Then the services of cloud providers are used by the banking sector and wholesale and retail enterprises. Analysts note that recently there has been a trend towards strong changes in the volume and growth rates of the SaaS market in various countries.

Cloud services are attractive primarily to medium and small businesses due to the high speed of deployment and automation, as well as the flexibility of solutions, Chalon said. SaaS is also simple and financially beneficial. "Nevertheless, security issues and compliance with some rules hinder the growth of this market in segments such as banking and government," said Christophe Chalon.

The 2009-2015 global market study SaaS is conducted in 25 countries (Austria, Australia Belgium, Brazil Canada,,,, France, China Denmark Finland Germany,,, India Japan Italy, Mexico, Middle East, Netherlands, Poland, Norway South,,,, United Russia Africa Spain Sweden Switzerland Kingdom, USA) and is divided into three regions - America, Asia-Pacific, region. EMEA

Analysts consider the following industries: manufacturing, banking, insurance, public sector, telecommunications, utilities, retail and wholesale, services and consumers, transport.

2011

According to analysts' forecast, in 2011 the market volume SaaS will reach $10.7 billion. Compared to 2010, the growth will be 16.2%.

2010

According to the preliminary calculation, in 2010 the volume of the global market "ON as a service" will grow by 15.7% and reach $9.2 billion. The market is expected to increase by another 16.2% next year. According to analysts, questions regarding security, SaaS wait times and the quality of service offered by providers are becoming a thing of the past with the development of the cloud technology market. This method of delivering software is increasingly chosen to solve more problems, according to Gartner.

Analysts have also noted an increase in SaaS use contracts, in which several thousand to several tens of thousands of jobs are transferred to the technology. SaaS and social platforms, including Facebook and Twitter, continue to be integrated. This is due to the fact that these platforms are often used as platforms for promoting goods and interacting with customers. According to experts, Content, Communications and Collaboration (CCC) continues to lead the market for corporate Solutions SaaS, which in 2010 will account for about $2.9 billion in revenue. The second largest share is occupied by CRM platforms - about $2.6 billion at the end of this year.

Gartner experts note that over the past two years, SaaS technology has been among the top five topics discussed, as well as the broader concept of cloud computing, of which software as a service is a part.

According to experts from corporate software developer CA Technologies, in 2011 the business will move from words to actions. This is mainly facilitated by overcoming the last barrier to cloud services - a barrier related to security issues. CA believes that cloud computing (including SaaS) will become not just an additional technology, but will change the principles of doing business in general.

2009

The global market, SaaS according to analysts' forecasts, in Gartner 2009 will grow by 21.9% compared to the previous year, that is, to 9.6 billion. In dollars the future, it will also continue to grow and by 2013 will reach $16 billion. At the same time, SaaS is distributed in different ways everywhere. The use of such solutions is growing, but the largest growth is observed within the framework of horizontal structures, virtual workgroups and projects. Web 2.0 Office Applications and Digital Content Creation (DCC) are still the areas where SaaS is spreading fastest: within office applications, the SaaS segment will increase to $512 million in 2009, and under DCC to $126 million. At the same time, the largest market for SaaS is the area of ​ ​ content support, communications and collaboration (CCC), where profits in 2009 will reach $2.5 billion.

In December 2010, Gartner announced that the global market size "software as a service" (Software as a Service - SaaS) in 2009 amounted to $7.9 billion. In 2010, the market will grow by 15.7% compared to last year to $9.2 billion.

IDC experts expect that in 2009 the SaaS market in the Asia-Pacific region, excluding Japan (APEJ), despite the difficulties, in general, will show itself well. So, it will reach $298 million, which is 18% more than in 2008. In addition, this indicator is 6 times higher than the expected growth indicator for the entire software market in this region for the year - 3%. As for individual countries, Australia makes the largest contribution to the market, whose share in the SaaS market in 2009 will be 45%. This is followed by China, whose expected share is 29%. If we talk about various market segments, then here the leadership belongs to CRM applications (31% of the market).

2008

Global profits in the SaaS market within the corporate sector, USD million <TBODY>{| borderColor=#ffffff cellSpacing=0 cellPadding=0 width="70%" align=center bgColor=#f6f6f6 border=1 style="BACKGROUND-COLOR: #f0f0f0"

| class=td11 vAlign=center align=middle width="60%" |

Market

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2009

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2008

|- | class=td11 vAlign=top align=left | Content, Communications, and Collaboration (CCC) Support | class=td11 vAlign=top align=left | 2,507 | class=td11 vAlign=top align=left | 2,155 |- | class=td11 vAlign=top align=left | Office applications | class=td11 vAlign=top align=left | 512 | class=td11 vAlign=top align=left | 136 |- | class=td11 vAlign=top align=left | Digital Content Creation (DCC) | class=td11 vAlign=top align=left | 126 | class=td11 vAlign=top align=left | 70 |- | class=td11 vAlign=top align=left | Customer Relationship Management (CRM) | class=td11 vAlign=top align=left | 2,169 | class=td11 vAlign=top align=left | 1,838 |- | class=td11 vAlign=top align=left | Enterprise Resource Planning (ERP) System | class=td11 vAlign=top align=left | 1,376 | class=td11 vAlign=top align=left | 1,256 |- | class=td11 vAlign=top align=left |Logistics (SCM) | class=td11 vAlign=top align=left | 861 | class=td11 vAlign=top align=left | 748 |- | class=td11 vAlign=top align=left | Other areas | class=td11 vAlign=top align=left | 483 | class=td11 vAlign=top align=left | 387 |- | class=td11 vAlign=top align=left | Total volume | class=td11 vAlign=top align=left | 8,035 | class=td11 vAlign=top align=left | 6,591 |}

According to research agency Gartner, office applications and digital content creation (DCC) are still the areas where SaaS is spreading fastest: within office applications, the SaaS segment will increase to $512 million in 2009, and under DCC - up to $126 million. At the same time, the largest market for SaaS is the area of ​ ​ content support, communications and collaboration (CCC), where profits in 2009 will reach $2.5 billion.

Notes