Global SaaS Market Size Analysis
There is no doubt that the global SaaS market size will grow in the near future. Today we want to share with you the current and forecasting niche analysis. Let’s start with the basics.
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What Is the Global SaaS Market?
SaaS (software as a service) is a model for delivering software over the Internet. It is a subscription-based delivery model in which customers access applications and services through the Internet. The market is segmented into five categories:
- The customer management segment offers solutions that help organizations manage customer data, including contact information, interactions, and purchase history.
- Business process outsourcing (BPO) refers to outsourcing activities typically done in-house, such as customer service, accounting, and marketing.
- The marketing automation segment provides solutions that automate online marketing activities such as email marketing, social media campaigns, and website optimization.
- Cloud-based SaaS services generally refer to a service delivery model implemented over the Internet instead of being on-premises.
- The lead management segment has been growing fast owing to increasing demand from B2B companies for lead generation solutions that can help reduce sales cycle length and identify potential customers.
Global SaaS Market Size: Expectations
The SaaS market was evaluated at $143 billion in 2021 and is expected to grow at a CAGR of 25% during the forecast period 2022-2028. Thus, experts think it will reach $720.44 billion by 2028.
Key Growth-Driving Factors
The key drivers of the global SaaS market growth include:
● an increasing adoption of cloud-based solutions & demand for automation and digitalization across businesses
● the growing trend of outsourcing business processes to the third-party providers
● an increase in investment in new SaaS platforms
Other factors driving the market's growth presuppose expanding cloud-based software as a service offering, the growing popularity of mobile apps for enterprise customers, and the rising demand for innovative SaaS solutions.
The major restraints are the high cost of acquisition, lack of possibility to look into customer behavior, and slow adoption by large enterprises.
Challenges & Opportunities
The SaaS market faces several challenges, such as high capital investments and lack of skilled human resources. In addition, there is a high demand for global collaboration among market players to create unconventional solutions that can meet the needs of end-users.
The growth is attributed to the increasing adoption of SaaS and big data solutions by businesses across various industries. Experts also highlighted to be the critical drivers for this market, including the necessity for enhanced efficiency and agility in business operations, rising demand for omnichannel services, and the growing trend of digital transformation.
Global SaaS Market Size: Statistics
Marketing and Sales
Tom Tunguz report shows that startups typically spend over 91% of their initial investments on the marketing department. This gives them almost a year for a payback period on customer acquisition cost (CAC).
The importance of marketing and sales departments for businesses cannot be overstated. Without a strong marketing and sales strategy, a company might quickly lose customers, which would ultimately lead to the financial turmoil.
These departments can help identify new leads, generate them into current clients, create and manage product roadmaps, develop pricing strategies, and more. In short, a strong marketing and sales team is essential for any company looking to remain successful in the market. And SaaS solutions are good helpers in this situation.
SaaStr analysis says that specialized the SaaS solutions for marketing activities can help businesses build confidence. The reason for it lies in a well-known brand that brings in a significant income from repeat orders through referrals.
One of our recent articles highlights SaaS pricing models. Now it’s time to talk in more detail about the widespread ones:
● User-based pricing and a one-month free trial option are employed by 50% of the top SaaS companies
● Half of all SaaS startups and companies tend to implement a value-based approach
● Usage-based pricing is spread among 33% of SaaS companies
Business and Customers
There are many reasons why the SaaS market is so popular at present. Firstly, it is a convenient way to get started with a business. With SaaS you can create a project pretty fast, and you can also make use of already existing tools and resources to boost it.
Secondly, this market offers flexibility. You can use SaaS to supplement your own work or to cooperate with someone else to create a project. With it, you can also control your schedule and development process wherever you want.
Interesting fact - statistics show that 67% of active users of the free trial have a high probability of buying the full subscription after using the trial version.
By the way, recently, we posted a material dedicated to SaaS development. So why wouldn't you check it out as well?
The global SaaS market size is expected to increase in the next few years. The key factors driving its progress include the growth in the economies of the countries in which the SaaS market is located and the increase in the number of businesses using its services.
We propose you join this field and earn the benefits that the SaaS market can bring. Wetelo are glad to help you with this goal. Our team has solid skills to translate your most daring ideas into reality.
So feel free to contact us if you are interested in bringing your SaaS to life. Have a nice day!