Software As A Service (SaaS) Market Size 2024-2028 

The software as a service (SaaS) market size is forecast to increase by USD 423.2 billion at a CAGR of 21.21% between 2023 and 2028. The market is experiencing significant growth, driven by the official use of web-based applications for various purposes through net browsers. The deployment model's flexibility and convenience have led to its widespread adoption in diverse application areas, including Human Resource Management, Media and Entertainment, and startups. According to Card Connect Research, the market is expected to witness a rise in leads and prospects due to the increasing use of mobile devices and 3D printing technologies. However, challenges persist, such as system integration issues. The market trend toward vertical SaaS solutions is also gaining momentum, with businesses recognizing the benefits of industry-specific applications. As a result, the SaaS market is projected to expand at a strong rate, offering numerous opportunities for innovation and growth.

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The market is witnessing significant growth due to the increasing adoption of cloud-based solutions by various industries. Alphabet, through its Google cloud computingMarketplace, offers a range of SaaS products to IT companies and B2C enterprises. Google Workspace, a part of Alphabet's offerings, is gaining popularity due to its collaboration features, enabling remote work policies. Major players also dominate the market with their comprehensive cloud solutions. Cloud consulting services are also on the rise, as more businesses seek expert advice on implementing SaaS products.

Furthermore, communication service providers are also joining the bandwagon, offering SaaS solutions to cater to the growing demand for digital transformation. The level of digitization and current exchange rates are main drivers of the SaaS market growth. Time, space, information, devices (laptops, tablets), team partnerships, and quarterly earnings are crucial factors influencing the market. VAT and expert opinions are also relevant segments of the SaaS market analysis. SaaS products continue to revolutionize how businesses operate, providing flexibility and efficiency in managing information and operations.

Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Deployment
  • Public cloud
  • Private cloud
  • Hybrid cloud
• End-user
  • Large enterprises
  • SMEs
• Geography
  • North America
    • US
  • Europe
    • Germany
    • UK
  • APAC
    • China
    • Japan
  • South America
  • Middle East and Africa

By Deployment Insights

The public cloud segment is estimated to witness significant growth during the forecast period. The market encompasses the delivery of computing functionality and applications over the Internet, primarily offered by third-party providers on a subscription basis. The public cloud segment of SaaS is projected to expand at a moderate pace during the forecast period, as the market reaches a maturity level. In this model, IT services, including software applications, are made accessible to multiple tenants via the Internet or virtualization. These services extend beyond SaaS to encompass Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), which provide resources such as bandwidth, network connections, IP addresses, and storage, enabling SaaS solutions to operate efficiently on the IaaS platforms of companies.

Furthermore, key industries adopting SaaS include large enterprises in IT and telecom, healthcare, education, B2B, and B2C enterprises. companies catering to these industries offer solutions for human capital management, operations management, and other business functions, contributing significantly to market growth.

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The Public cloud segment was valued at USD 108.40 billion in 2018 and showed a gradual increase during the forecast period.

Regional Insights

North America is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market is experiencing significant growth, particularly in the public cloud segment. North America, an early adopter of public cloud services, is anticipated to contribute substantially to the global market revenue during the forecast period. The increasing demand for cloud computing services in the US, driven by the availability of advanced infrastructure and the presence of numerous Cloud Service Providers (CSPs), is a major factor fueling market growth in the region.

Furthermore, enterprises in North America are investing in IT to streamline operations through the implementation of enterprise applications in sectors like human capital management, operations management, healthcare, education, B2B and B2C enterprises, and IT and telecom. This shift towards cloud-based solutions is expected to continue, as businesses seek to optimize their operations and reduce costs.

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Market Driver

Augmenting the use of mobile apps is the key driver of the market. The market is experiencing significant growth, with major players leading the charge. IT companies are increasingly relying on cloud software solutions to support their remote work policies and meet the demands of Communication Service Providers for advanced cloud computing technologies. The Alphabet and Google Workspace suite, Microsoft's Office 365, and IBM's cloud offerings are popular choices for businesses seeking to augment their capabilities in areas such as productivity, collaboration, and security. Hybrid cloud solutions are also gaining traction, allowing companies to maintain some on-premises infrastructure while leveraging the benefits of the cloud.

Furthermore, the Cloud Security Alliance plays a crucial role in ensuring the security and privacy of data in the cloud. The education sector is also embracing digitalization, with students and teachers utilizing educational apps on mobile devices to access resources and simplify the learning process. Schools are implementing bring-your-own device (BYOD) policies, enabling students to use their own smartphones, laptops, and tablets in the classroom.

Market Trends

The increasing use of vertical SaaS is the upcoming trend in the market. Software as a Service (SaaS) in the market is witnessing significant growth, with major technology companies, such as Alphabet through Google Cloud Marketplace, Microsoft Cloud, and IBM Cloud, leading the charge. These cloud software providers offer various industry-specific solutions, known as Vertical SaaS, through their platforms. For instance, Google Workspace caters to communication and collaboration needs, while IBM Cloud Integration focuses on seamless integration of various applications. IT companies and Communication Service Providers are increasingly adopting these solutions due to their ability to augment industry-specific processes. Vertical SaaS is a cost-effective and specialized option for enterprises, particularly in sectors like retail, insurance, and auto manufacturing.

Furthermore, solutions such as retail analytics software, healthcare business intelligence (BI) software, and modern logistics analytics are customized to meet the unique requirements of these industries and their supply chains. By utilizing vertical SaaS, enterprises can generate valuable industry-specific customer data and intelligence, enabling them to refine their operations and gain a competitive edge. The Cloud Security Alliance plays a crucial role in ensuring the security of these cloud-based services, making remote work policies more feasible and efficient for businesses. The hybrid cloud model further enhances the flexibility and scalability of these solutions, making them an attractive choice for enterprises in the modern business landscape.

Market Challenge

The issues associated with system integration is a key challenge affecting the market growth. The market is witnessing significant growth as more enterprises shift towards cost-effective IT solutions. Alphabet's Google Cloud Marketplace, Microsoft Cloud, IBM Cloud Integration, and other cloud software offerings are increasingly popular among businesses. SaaS enables enterprises to avoid the expenses of buying and maintaining their IT infrastructure, allowing them to focus on their core competencies. Remote work policies and the need for efficient communication services have further augmented the demand for SaaS.

However, integrating new software systems and IT infrastructure can pose challenges for enterprises. One such challenge is connecting to monolithic systems, which combine the UI and data access code into a single program from a single platform. To mitigate these issues, IT companies and Communication Service Providers offer cloud consulting services. Cloud computing technologies continue to evolve, with hybrid cloud solutions and cloud security alliances playing crucial roles in addressing the complexities of SaaS integration.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Accenture Plc: The company offers software as a service, such as customer relationship management and enterprise resource planning.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Accenture Plc
• Adobe Inc.
• Alphabet Inc.
• Amazon.com Inc.
• BetterCloud Inc.
• Box Inc.
• Cisco Systems Inc.
• Convedo Ltd.
• Fujitsu Ltd.
• Hewlett Packard Enterprise Co.
• Infosys Ltd.
• International Business Machines Corp.
• Intuit Inc.
• Microsoft Corp.
• Oracle Corp.
• Salesforce Inc.
• SAP SE
• ServiceNow Inc.
• Shopify Inc.
• Zendesk Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The market is experiencing significant growth due to the increasing digitization of businesses across various industries. The Internet has become an essential tool for IT and telecom companies, communication service providers, large enterprises, B2B and B2C enterprises, healthcare, education, and SMEs. SaaS products, such as enterprise resource planning, customer relationship management, human capital management, operations management, and communication services, are deployed on a subscription basis and can be accessed via web browsers or mobile devices. The main drivers of this market include flexibility, investment in digital transformation, and the ongoing costs savings associated with hosting data in the cloud rather than on local servers.

However, the competitive environment is intense, with IT companies offering a range of SaaS products and cloud consulting services. The level of digitization varies from country to country, with some regions more advanced than others. For instance, North America and Europe are leading the way in SaaS adoption, while emerging economies are catching up. The adoption of cloud computing technologies, including artificial intelligence, IoT, PaaS, and RPA, is also driving growth in the SaaS market. Despite the benefits, there are challenges, such as data security concerns, cyber-attacks, and downtime issues. The Cloud Security Alliance is working to address these concerns, while businesses are investing in employee well-being and operational efficiency to mitigate the risks. Furthermore, the SaaS market is expected to continue growing, with mobile Saas growth being a major attributing factor. T

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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