The software as a service market is expected to grow from US$ 167.53 billion in 2022 to US$ 462.94 billion by 2028; it is anticipated to grow at a CAGR of 18.5% from 2022 to 2028.
SaaS applications have the potential to cater services to small, medium, and large enterprises efficiently. Organizations today are growing rapidly, and they require operations to scale up as per the demand. With the ease in scalability feature offered by the SaaS model, many organizations seem to adopt the SaaS model for their various operations, be it managing their IT infrastructure, financial management, human capital management, asset monitoring, or any other useful domain. Adopting such a modular structure that can scale up the IT infrastructure, storage, computing, fabric, and virtualization in a single architecture is being rapidly adopted across the globe, offering lucrative business opportunities to the global software as a service market players. The flexibility offered by SaaS models gives a competitive advantage to companies by quickly adjusting to customers' demands and making the necessary changes in operations efficiently. High efficiency has become a prerequisite for leading companies today, and the deployment of SaaS models gives them the power to be flexible and efficient. The tools utilized by SaaS vendors are typically more robust and up-to-date than those available to most local organizations. These factors are influencing the software as a service market growth.
Also, SaaS vendors make use of redundant servers to back up data. Thus, in case of any malfunction in the cloud, users are automatically redirected to a backup server without any performance issues. Furthermore, SaaS vendors perform regular data backups. Since there is a single version of the software, more vendor resources are typically directed to identifying issues/bugs and the related patches/fixes required to address those concerns. These factors are further propelling the software as a service market growth.
SaaS is an advanced technology transforming traditional on-premise software systems into a modern cloud-based solution globally. Along with reduced efforts of running a process and installing and purchasing software, it also helps an organization minimize costs and maximize revenue. Consequently, private organizations worldwide have understood the potential behind these services and come up with cloud-based services. These factors are boosting the growth of the market.
With the growing concerns for security and privacy of data, private cloud deployment model was developed but that proved to be very costly. All the data of organizations cannot be mission critical and sensitive. Various type of data demands for varying levels of security. The flexibility of storing less critical data over public cloud while mission critical data over hybrid cloud makes it highly attractive for organizations to adopt. Banking sector that has to store large amounts of sensitive data is the most benefitted business segment due to the introduction of hybrid cloud deployment model. Hybrid cloud model is thus expected to grow at a rapid pace during the forecast period, offering lucrative growth opportunities to the hybrid software as a service market share.
Regional Analysis of Software as a Service Market
From the regional perspective, North America held the largest share of the global software as a service market in 2021. With the increasing customer demand for high-quality products and services, North American companies are constantly innovating to serve their customers in the best possible way. This is increasing the demand for solutions such as CRM and ERP. Additionally, the presence of SaaS vendors such as Microsoft Corporation, Amazon Web Services, Symantec Corporation, IBM, ORACLE, ADP LLC, Workday, and Google across the region is further contributing to the rapid growth of the market.
Lucrative Regions – Software as a Service Market Share
Market Insights – Software as a Service Market
Based on application, the software as a service market is segmented into customer relationship management (CRM), enterprise resource planning (ERP), human resource planning (HRP), supply chain management (SCM), and others. The CRM segment accounted for the largest share of the global software as a service market in 2021. With its numerous advantages, SaaS CRM has successfully changed organizations' perceptions about how front-office software systems are used and controlled. Particularly for CRM, the SaaS applications provide various benefits like best-in-place infrastructure without the need for capital expenditure, lesser implementation and integration times with existing systems, software upgrades without any significant bottleneck, consistent system uptime, and 24/7 staffing. It actively tracks and manages customer information, captures customer emails, simplifies repetitive tasks, and delivers instant insights and recommendations. As the business grows, CRM helps in customizing functions. According to Salesforce—one of the prominent CRM providers—the solutions on an average help their clients enhance their sales by 30%, and there is a 40% increase in customer satisfaction. These factors are further contributing to the growth of the segment.
Players operating in the software as a service market are mainly focused on developing advanced and efficient products.
- In December 2022, Microsoft Corporation announced its 10-year partnership with LSEG to offer data analytics and cloud infrastructure solutions.
- In November 2022, shadow announced the launch of its new cloud storage service named shadow drive.
The software as a service market is segmented into five major regions—North America, Europe, Asia Pacific (APAC), Middle East & Africa, and South America. In 2021, North America led the market with a substantial revenue share, followed by Europe. Further, Asia Pacific is expected to register the highest CAGR in the software as a service market from 2022 to 2028.
The key global software as a service market players include ADP LLC, Amazon.com Inc, Google Inc, IBM Corporation, Microsoft Corporation, Oracle Corporation, Salesforce.com Inc, SAP SE, Fujitsu Limited, and Workday Inc.
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Deployment Model, Application, and End User
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
This text is related
to country scope.
The List of Companies - Software as a Service (SaaS) Market
- Google, Inc.
- Oracle Corporation
- Amazon.com, Inc.
- Salesforce.com, Inc.
- Fujitsu Ltd.
- Workday, Inc.
- ADP, LLC
- IBM Corporation
- SAP SE
- Microsoft Corporation
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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