Software as a Service - South Korea

South Korea

Revenue in the Software as a Service market is projected to reach US$3.93bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 19.43%, resulting in a market volume of US$9.55bn by 2029.
The average spend per employee in the Software as a Service market is projected to reach US$131.50 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

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Currency

Analyst Opinion

The Software as a Service market in South Korea has experienced significant growth in recent years, driven by customer preferences for flexible and scalable cloud-based solutions.

Customer preferences: South Korean customers have shown a strong preference for Software as a Service (SaaS) solutions due to their flexibility and scalability. SaaS allows businesses to access software applications and services through the internet, eliminating the need for on-premises installations and maintenance. This not only reduces costs but also provides the agility needed to quickly adapt to changing business needs. Additionally, SaaS solutions often offer subscription-based pricing models, which further appeals to South Korean businesses looking for cost-effective options.

Trends in the market: One of the key trends in the South Korean SaaS market is the increasing adoption of SaaS solutions across various industries. Businesses in sectors such as e-commerce, finance, healthcare, and manufacturing are leveraging SaaS applications to streamline their operations, improve efficiency, and enhance customer experiences. For example, e-commerce companies are using SaaS platforms to manage their online stores, while financial institutions are utilizing SaaS-based analytics tools to gain insights into customer behavior and make data-driven decisions. Another trend in the South Korean SaaS market is the rise of local SaaS providers. While international SaaS vendors have a strong presence in the market, there is a growing demand for locally developed solutions that cater to the specific needs and preferences of South Korean businesses. These local providers understand the local market dynamics and can offer customized solutions that address the unique challenges faced by South Korean businesses.

Local special circumstances: South Korea has a highly advanced and tech-savvy population, which has contributed to the rapid adoption of SaaS solutions. The country has one of the highest internet penetration rates in the world, and its population is known for embracing new technologies. This favorable environment has created a fertile ground for the growth of the SaaS market in South Korea. Furthermore, the South Korean government has been actively promoting the adoption of cloud computing and SaaS solutions. It has implemented various initiatives to support the development of the SaaS market, including providing financial incentives and creating a favorable regulatory environment. These efforts have helped to create a thriving ecosystem for SaaS providers and attract investments in the sector.

Underlying macroeconomic factors: The South Korean economy has been steadily growing, driven by strong domestic consumption and exports. This has created a favorable business environment for SaaS providers, as businesses are willing to invest in technology solutions to enhance their competitiveness. Additionally, the country has a high smartphone penetration rate, which has further fueled the demand for mobile-friendly SaaS applications. In conclusion, the Software as a Service market in South Korea is experiencing significant growth due to customer preferences for flexible and scalable cloud-based solutions. The increasing adoption of SaaS across various industries, the rise of local providers, the tech-savvy population, and the government's support for cloud computing are all contributing to the development of the market. With a strong economy and high smartphone penetration rate, South Korea presents a promising market for SaaS providers.

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.