Software as a Service - South Africa

South Africa

Revenue in the Software as a Service market is projected to reach US$1.21bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 18.27%, resulting in a market volume of US$2.80bn by 2029.
The average spend per employee in the Software as a Service market is projected to reach US$48.16 in 2024.
In global comparison, most revenue will be generated in the United States (US$190.10bn in 2024).

Key regions: Japan, United Kingdom, United States, Italy, Germany

Market

Region

Region comparison

Currency

Analyst Opinion

The Software as a Service market in South Africa is experiencing significant growth and development.

Customer preferences: Customers in South Africa are increasingly adopting Software as a Service (SaaS) solutions due to their flexibility, scalability, and cost-effectiveness. SaaS allows businesses to access software applications and services through the internet, eliminating the need for expensive hardware and infrastructure. This is particularly appealing to small and medium-sized enterprises (SMEs) in South Africa, as it allows them to access advanced software tools without the high upfront costs.

Trends in the market: One of the main trends in the SaaS market in South Africa is the increasing demand for cloud-based solutions. Businesses are realizing the benefits of cloud computing, such as improved collaboration, data security, and remote accessibility. This trend is driving the adoption of SaaS solutions across various industries, including finance, healthcare, and manufacturing. Another trend in the market is the rise of industry-specific SaaS solutions. As businesses in South Africa become more specialized, there is a growing demand for software applications tailored to their specific needs. This trend is driving the development of niche SaaS providers that cater to specific industries, offering customized solutions and industry expertise.

Local special circumstances: South Africa has a highly competitive business environment, with a large number of SMEs and startups. These businesses often have limited resources and budgets, making SaaS an attractive option. SaaS allows them to access enterprise-level software solutions at a fraction of the cost, leveling the playing field and enabling them to compete with larger companies. Additionally, South Africa has a unique set of challenges when it comes to technology infrastructure. The country has a relatively low internet penetration rate compared to other developed countries. However, the government and private sector are making significant investments in improving internet connectivity and expanding broadband access. This infrastructure development is driving the adoption of cloud-based solutions, including SaaS, as businesses gain access to faster and more reliable internet connections.

Underlying macroeconomic factors: The South African economy is experiencing a digital transformation, with businesses across various sectors embracing technology to drive growth and efficiency. This digital transformation is fueling the demand for SaaS solutions, as businesses seek to streamline their operations, improve customer experience, and gain a competitive edge. Furthermore, the COVID-19 pandemic has accelerated the adoption of SaaS in South Africa. The lockdown measures and remote work arrangements have highlighted the importance of cloud-based solutions for business continuity and remote collaboration. As a result, businesses are increasingly turning to SaaS to enable remote work, facilitate online collaboration, and ensure the seamless delivery of services to customers. In conclusion, the Software as a Service market in South Africa is witnessing significant growth driven by customer preferences for flexible and cost-effective solutions, the adoption of cloud computing, and the unique circumstances of the local market. The rise of industry-specific solutions and the ongoing infrastructure development are further contributing to the expansion of the SaaS market in South Africa.

Methodology

Data coverage:

The data encompasses B2B and B2C enterprises. Figures are based on the money spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

The segment size is determined through a top-down approach. We use financial statements such as annual reports, quarterly earnings, and expert opinions to analyze the markets. To estimate the segment size for each country individually, we use relevant key market indicators and data from country-specific industry associations, such as GDP and level of telecommunications infrastructure.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the relevant segment. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.