Software as a Service - Worldwide

Revenue in the Software as a Service market is projected to reach US$328.20bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 19.30%, resulting in a market volume of US$793.10bn by 2029.
The average spend per employee in the Software as a Service market is projected to reach US$92.19 in 2024.
In global comparison, most revenue will be generated United States (US$187.20bn in 2024).

Definition:

Software as a Service (SaaS) refers to the type of public cloud service that delivers software applications over the internet on a subscription basis. Users can access and use the software through web browsers without having to install or maintain it locally. SaaS eliminates the need for purchasing, installing, and updating software, thus offering convenience and automatic updates while allowing users to focus on using the software to meet their requirements. The SaaS market includes the companies that provide these types of cloud-based software resources and services to individuals, businesses, and organizations. A typical example of this type of service is Microsoft Office 365, an SaaS suite of applications (e.g., Word, Excel, and PowerPoint) available for purchase by subscription and accessible via a web browser.

Additional Information:

The Software as a Service (SaaS) market comprises revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players of the SaaS market include companies such as Microsoft (Office 365), Salesforce (Customer 360), Oracle (Cloud applications), and IBM (Cloud).

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Enterprise software, such as SAP ERP, Oracle ERP Cloud, Salesforce CRM, and Microsoft Dynamics365
Productivity software, such as Microsoft 365, Google Workspace, and Adobe Creative Cloud

System infrastructure software, such as Microsoft Windows Operating System and Linux Operating System
On-premises software, such as on-premises versions of Microsoft Office, SAP ERP, and Oracle Database
Business-Process-as-a-Service (BPaaS), such as payroll management and accounting solutions via ADP Workforce Now, Intuit QuickBooks Online, Workday, and Oracle NetSuite

The Software as a Service market in the Public Cloud market worldwide has been experiencing mild growth, driven by factors such as increasing demand for digital solutions, growing awareness of the benefits of SaaS, and the convenience of using online services. This moderate growth rate is influenced by various factors, including competition, changing consumer needs, and evolving technology.

Customer preferences: As the demand for flexible and cost-effective software solutions continues to rise, consumers are increasingly turning to Software as a Service (SaaS) models within the Public Cloud Market. This trend is driven by the need for on-demand access to a wide range of applications and services, as well as the desire for seamless integration with existing systems. Additionally, with the rise of remote work and the need for collaboration across different locations, SaaS solutions provide an efficient and secure way for teams to work together in real-time. The growing popularity of SaaS is also fueled by the increasing number of companies adopting a remote-first or hybrid work model, as well as the need for businesses to scale and adapt quickly to changing market conditions.

Trends in the market: In the Software as a Service Market within the Public Cloud Market, there is a growing trend of companies adopting multi-cloud strategies, utilizing different cloud providers for various applications and services. This trend is driven by the need for flexibility and cost-effectiveness, as well as the increasing availability of specialized cloud services. This trajectory is significant for industry stakeholders as it allows for a more tailored approach to cloud computing and can provide a competitive advantage. However, it also presents challenges in terms of managing multiple cloud environments and ensuring seamless integration. As this trend continues, we can expect to see an increase in demand for cloud management and integration solutions in the SaaS market.

Local special circumstances: In China, the Software as a Service Market within the Public Cloud Market is rapidly expanding, driven by the country's large population and increasing adoption of digital technologies. The Chinese government's initiatives to promote digital transformation and support local tech companies have also contributed to the market's growth. Additionally, cultural factors such as the preference for subscription-based services and the popularity of mobile payment methods have further boosted the demand for SaaS solutions in China, making it a highly competitive and unique market within the global public cloud industry.

Underlying macroeconomic factors: The Software as a Service Market within the Public Cloud Market is heavily influenced by macroeconomic factors such as global economic trends, national economic health, and fiscal policies. Countries with strong economic growth and stable financial indicators are experiencing a higher adoption of Software as a Service solutions due to the increased investment in digital transformation and cloud computing. Additionally, favorable regulatory environments and government initiatives to promote digitalization are also driving the growth of the market. On the other hand, regions with economic challenges and limited funding for technology adoption are experiencing slower market growth. The increasing need for cost-effective and scalable solutions, especially in emerging economies, is also contributing to the growth of the Software as a Service Market within the Public Cloud Market.

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.

This report presents a comprehensive analysis and additional information on the Technology market, in a PDF format.

Together with platform as a service (PaaS) and infrastructure as a service (IaaS), software as a service (SaaS) is one of the three primary tiers of cloud computing. It allows businesses to redirect resources away from IT hardware, software, and personnel expenses, and towards other business needs. Currently, the most prominent companies in the SaaS market are Microsoft, Salesforce, Oracle, SAP, and Google.