To The Moon

By Business and Tech Writer Sofiya Merenych &Marina Chernish at Clockwise Software

Michael Warrilow, research vice president at Gartner, in this article, we take a look at some of the current SaaS statistics, and highlight a few SaaS trends that are moving the industry right now.

Businesses should consider the rapidly changing SaaS industry trends to adjust to them as quickly as possible. We offer you the most current SaaS statistics in 2023 that can be game-changing for your business.

key saas statistics affecting the industry

We have analyzed the most recent SaaS reports and have chosen the most relevant statistics on the SaaS market, SaaS businesses, and the status of the SaaS distribution model across the world. These statistics should be insightful and help you make important business decisions.

SaaS market growth statistics

The pandemic was an important factor in the growing popularity of SaaS products, as many companies were forced to switch to remote work and had to use software to make operations run smoothly. Let’s take a look at how the SaaS market is developing now.

1. SaaS is evolving along with the growing popularity of remote work

The first months of 2020 were the most difficult part of the global pandemic. Сompanies started to do everything they could to ensure their employees remained productive while working from home. Numerous technologies were employed to empower remote workspaces. SWZD has reported that 64%_ _of businesses implemented remote work due to the pandemic. The same report suggests that nearly 25% of workers will continue to work remotely despite being able to safely return to the office.

The economic, organizational and societal impact of the pandemic will continue to serve as a catalyst for digital innovation and adoption of cloud services. This is especially true for use cases such as collaboration, remote work and new digital services to support a hybrid workforce.

Henrique Cecci, senior research director at Gartner

According to Statista, the number of companies that use SaaS services has been constantly increasing since 2015. The biggest leap was between 2017 and 2021, over which period the number of companies grew almost sevenfold (from 16 to 110 SaaS apps used by a company on average).

It’s safe to say that in 2022, many businesses will continue to adopt cloud-based services to fulfill the needs of their remote workers.

2. Growth of the SaaS market isn’t likely to slow down

The total value of the global SaaS market has been showing stable growth over the last few years. In 2021, it was estimated at approximately $152.18 billion. In 2022, this value increased to $176.62 billion, growing by around 16% in one year. In 2023, the value of the SaaS market is expected to reach $208.1 billion, which is 17.5% more than in 2022.

3. Half of all data in the world will be stored in the cloud by 2025

The 2020 Data Attack Surface Report estimates that by 2025, data stored in the cloud will reach 100 zettabytes (1 zettabyte = 1 billion terabytes), which is 50% of the entire world’s digital data.

4. The SaaS market has been growing intensively since 2015

According to BetterCloud, the number of IT-sanctioned SaaS apps has increased tenfold since 2015. It’s expected that by 2025, 85% of business apps will be SaaS-based.

5. SaaS and business statistics

It wouldn’t be a mistake to claim that SaaS is one of the most important technologies for business success right now. So how are things going with SaaS in the business field?

6.SaaS adoption promotes gradual migration to centralized management

From the BetterCloud report, we know that companies today are using seven times the number of SaaS products they used five years ago. Gartner predicts that these companies will go further, starting to use SaaS even more intensively:

By 2026, 50% of organizations using multiple SaaS applications will centralize management and usage metrics of these apps using a SaaS Management Platform (SMP) tool.

According to this prediction, half of companies that now actively use SaaS applications will start using SaaS SMP tools for centralized management by 2026.

7. SaaS is one of the most important technologies for business success

In a Harvey Nash survey published in 2021, 73% of 1,724 respondents said that SaaS technologies are important for realizing business goals. Thirty-five percent claimed that SaaS technologies are “quite important,” and 38% said they were “very important.”

SaaS technology is prioritized by the majority of business owners. They choose it over artificial intelligence, Internet of Things (IoT), and the blockchain.

importance of technologies for businesses

8. There’s a growing demand for employees in SaaS companies

As of January 2022, Salesforce was the largest SaaS provider in the world. In 2007, the company had only 767 employees and by 2022 this number had increased to 73,541 employees. We see a steady growth over the last few years:

growth of salesforce employees number per year

In just three years (from 2019 to 2022), the number of employees doubled.

The second largest SaaS provider, Adobe, shows a similar pattern in terms of employee count. For example, 22,516 people worked for Adobe in 2020, and this number increased by 3,472 in just one year to reach 25,988 in 2021.

9. There’s a growing need for businesses to update their IT infrastructure

According to SaaS stats from SWZD, 52% of midsize businesses and 56% of enterprises that have never used SaaS technologies before are now interested in doing so. After COVID-19, a lot of companies started to feel the need to increase their budgets in order to create and support a remote workspace for their employees with the help of cloud-based services.

10. Large and midsize enterprises are actively using SaaS applications

A BetterCloud survey reveals that companies with fewer than 50 employees tend to use no more than 16 SaaS applications. Meanwhile, companies that employ from 50 to 100 employees use 24 SaaS applications on average, which is a 50% increase. Companies with more than 1,000 employees use over 150 SaaS applications on average.

This shows that larger companies tend to use more SaaS apps.

11. The majority of organizations use at least one SaaS service

O’Reilly surveyed 1,283 software engineers, technical leads, and decision-makers from all around the world to find out the scale of SaaS usage by organizations. The survey revealed the following:

• 88% of respondents said their organization uses at least one cloud service and will increase their SaaS use over the next year.

• 25% of respondents claimed that they expect their company to move all of their software to the cloud in 12 months.

• 49% of respondents stated that they are going to continue using traditional, on-premises software along with cloud services.

12. More and more companies are trying to make SaaS a long-term part of their business

As SaaS market growth seems to be at its peak, fewer companies are afraid to invest their money in switching to SaaS technologies. BetterCloud statistics show that around 38% of companies claim they are running almost completely on SaaS, while 80% of businesses say that they are planning to switch all of their systems to SaaS by 2025.

13. The shift to SaaS technologies will have a huge impact on enterprise IT spending

Gartner claims that the transition to the cloud will increase IT expenses by more than $1.3 trillion in 2022 and that this number will grow to $1.8 trillion in 2025. Around 65.9% of spending on software is expected to go to SaaS technologies by 2025, up from 57.7% in 2022.

14. Business leaders claim SaaS improves business agility

Workday reports that 75% of business leaders have moved to SaaS as it helps to improve business agility. Almost the same percentage of interviewees said that SaaS implementation is fast and trouble-free, so they see no problems in moving to SaaS completely.

15. Companies expect their service providers to switch to SaaS

According to FinancesOnline, 86% of organizations expect the majority of the software involved in their business processes will be available as SaaS solutions by 2022.

16. The vast majority of organizations use SaaS products to increase their productivity

The most common reasons why companies use SaaS are to increase productivity (54%), reduce costs (35%), and increase security (27%).

motivations to use more saas

17. SaaS giants increased their valuations between 2020 and 2021

Between 2020 and 2021, the growth of many of the world’s biggest SaaS companies was astronomical.

capitalization of the largest saas companies in 2021-2022

Shopify claims that 2021 was its “biggest year ever.” The company’s revenue increased by 225% (from $52.1 billion to more than $185 billion) in less than 20 months.

The last two years have been extraordinary. We nearly tripled revenue, more than doubled GMV and the Shopify team, and the number of merchants using Shopify is nearly twice as big as 2019 levels. We are emerging from the sprint of these last two years even stronger and more ambitious.

Harley Finkelstein, Shopify President

From January 2020 to September 2021, Salesforce’s revenue grew from $161 billion to $251 billion, increasing by more than 50%.

18. SaaS will become a key enabler of new and upcoming technologies

According to Oracle, 91% of organizations believe that SaaS is going to help them adopt emerging technologies such as AI, the Internet of Things, digital assistants, the blockchain, and virtual and augmented reality.

19. More companies have switched to the hybrid–remote model of work

According to GitLab’s Remote Work Report 2021, 42% of companies have switched to a hybrid-remote arrangement after 2021, and such arrangements are supported by SaaS-powered technologies.

SaaS statistics in different parts of the world

Slowly but surely, SaaS is taking over the world. In some countries, it’s taking a confident position in both the business-to-business (B2B) and business-to-consumer (B2C) domains. In other countries, it’s just starting to gain momentum.

1. SaaS in North America

The most advanced SaaS market is in North America. The region has many enterprises with advanced IT infrastructure and the largest SaaS vendors in the world: Google, Microsoft, Adobe, etc. North America also takes first place by the number of SaaS companies: as of 2022, there were 17,000 SaaS organizations in the US alone, among 25,000 SaaS companies worldwide. Around 60% of all SaaS companies in the world are located in the United States.

2. SaaS in Europe

In Europe, the SaaS market is expected to grow intensively till at least 2025. As of 2022, 42% of EU enterprises use cloud-based technologies (primarily for file storage and email hosting). It’s a noticeable increase compared to 2020, when the figure was 36%.

• Germany is seen as the European country that will experience the largest increase in the SaaS segment. The value of the German SaaS market is expected to grow from 6.85 billion euros in 2022 to 16.3 billion euros in 2025.

• In France, revenue from the SaaS segment is projected to reach $6.82 billion in 2022. The annual growth of SaaS companies’ revenue is likely to reach 10.65%, resulting in a market volume of $10.22 billion by 2026.

• In the United Kingdom, the SaaS market generated approximately $10.2 billion in revenue in 2021. Revenue for the UK market is likely to reach around $16.47 billion by 2026.

3. SaaS in India

The SaaS industry in India is expected to grow from $50 billion to $70 billion by 2030, winning 4% to 6% of the global SaaS market.

4. SaaS in the Asia-Pacific region

When it comes to the Asia-Pacific region, Japan appears to be a leader in SaaS adoption. The country accounts for at least 40% of the region’s SaaS spending.

Source:https://clockwise.software/blog/top-saas-development-trends/