Software As A Service Market Size, Share, Growth Analysis, By Component, By Deployment Mode, By Application, By Enterprise-Size, By Region - Industry Forecast 2024-2031

Global Software as a Service (SaaS) Market size was valued at USD 261.15 billion in 2022 and is poised to grow from USD 296.93 billion in 2023 to USD 829.34 billion by 2031, growing at a CAGR of 13.7% during the forecast period (2024-2031).

Software as a Service (SaaS) is a cloud-based model that allows users to access applications via the internet. The growing adoption of public cloud services by enterprises is a key factor driving this market. Companies are increasingly moving towards SaaS solutions for their ERP systems to avoid the costs associated with traditional on-premises software deployments. However, concerns about data security and privacy in public cloud environments could pose challenges to market growth. The increasing use of emails, instant messaging apps, and video conferencing also boosts the demand for smart devices, which in turn drives the SaaS market. Additionally, the adoption of CRM SaaS solutions is rising, helping companies reduce IT expenses and enhance scalability. The ease of customization and affordability of CRM SaaS solutions allow businesses to tailor their systems to meet specific needs, including security requirements. For example, AppOmni's partnership with Veeva Systems in December 2022 aimed to enhance security for Veeva CRM and Veeva Vault, enabling life sciences customers to utilize AppOmni's features for threat detection and configuration management, thereby ensuring data protection and regulatory compliance. Cloud-based SaaS offers a delivery model where applications are accessed online, with the software provider managing the necessary infrastructure, including networking, servers, and databases. This model eliminates the need for businesses to purchase, install, and maintain software and hardware. SaaS is akin to Application Service Providers and On-Demand Computing Software Delivery models, where the software is hosted and made available to users via the internet. The COVID-19 pandemic has positively impacted the SaaS market, as many businesses transitioned to cloud-based platforms during lockdowns. Government-enforced lockdowns accelerated the adoption of cloud services, particularly SaaS, to support remote business operations. This shift towards third-party software services during the pandemic significantly contributed to the growth of the SaaS market.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Software as a Service (SaaS) market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Software as a Service (SaaS) Market Segmental Analysis

The global software as a service (SaaS) market is segmented by Component, Deployment Mode, Enterprise-size, Application, Industry, and region. Based on Component, the market is segmented into Software and Services. Based on Deployment Mode, the market is segmented into Public Cloud, Private Cloud, and Hybrid Cloud. Based on Enterprise Size, the market is segmented into Large Enterprises and Small & Medium Enterprises. Based on Application, the market is segmented into Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Human Capital Management, Content, Collaboration & Communication, BI & Analytics, and Others. Based on Industry, the market is segmented into Banking, Financial Services & Insurance (BFSI), Retail & Consumer Goods, Healthcare, Education, Manufacturing, Travel & Hospitality, and Others. Based on region, the market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America.

Drivers of the Global Software as a Service (SaaS) Market

The expansion of cloud services among end-use businesses is expected to drive significant growth in the SaaS industry in the coming years. Major market players are increasing their investments to enhance their product portfolios, which is likely to spur further adoption. Additionally, the rising use of software solutions such as edge computing, virtualization, and containerization across various sectors is contributing to the growing acceptance of SaaS services. This trend towards embracing new technologies is creating new opportunities for industry participants. Furthermore, technologies like artificial intelligence, cloud computing, and big data are also experiencing growth and are anticipated to further support the SaaS industry. The integration of these advanced technologies with SaaS solutions is likely to drive innovation and expand market opportunities, positioning SaaS as a crucial component in the evolving technological landscape.

Restraints in the Global Software as a Service (SaaS) Market

The lack of robust security measures for various data types poses a significant challenge to the growth of the SaaS market, despite its increasing adoption for storing critical business and personal information. Security has become a top priority for companies and organizations, as SaaS misconfigurations are frequently identified as a major issue. Configuring internal applications can be complex for security teams, leading to compromised services, data leaks, and exposure of application programming interfaces, which increases the risk of unauthorized access to sensitive information. The primary cause of these misconfigurations is often a lack of understanding regarding changes in security settings, as SaaS solutions are utilized by multiple departments within an organization.

Market Trends of the Global Software as a Service (SaaS) Market

The market growth is driven by the rising demand for comprehensive software applications that address various business challenges. Modern companies are increasingly adopting SaaS platform solutions that integrate multiple functions, including customer relationship management (CRM), business intelligence, supply chain management, and e-commerce systems. These solutions can be customized to meet specific business needs and are accessible across corporate networks using different cloud technologies. As businesses expand, there is a growing requirement for SaaS platforms that align with their policies, regulations, and operational procedures. Additionally, with the increased use of mobile devices in the workplace, these applications enhance employee productivity, foster organizational improvement, and help identify new market opportunities for value capture.