In the recent developments, the SaaS market has registered tremendous growth and dynamic changes. The evolvement of SaaS emerged as a core foundation in the world of software because businesses started switching more and more towards cloud-based solutions. What is one of the trends is a rapidly spreading implementation of SaaS across various industries. Companies started through the on-premise software systems advantages to approach their applications over a network instead of using in- house solutions. This transition, however, has much more to bring – reduced costs aside from that it also improves scalability and flexibility.
A second emerging trend in SaaS market refers to a diversification of the supports offered. As a few major players have started the market initially, the area of specialized SaaS providers serving industries or business segments has significantly developed over recent years. Such a diversity gives businesses an opportunity to opt for the most specialized solutions that suit their individual needs. Things are no different from an application perspective. From CRM to human resource management and much more, we see specialised SaaS applications rising in popularity to provide specific solutions for specific investment management related problems. Among the trends that have emerged in the SaaS world, integration capabilities are major developments which are seen as imperative for both product and service offerings. Due to the rapid growth of business in a digitized world, the capacity that is being able in SaaS applications with other programmes and systems has become critical.
However, this move was caused by the need to have a connected and well synchronized workforce. SaaS providers are doing leverage on interoperability between SaaS solutions and organizations’ existing tools, technologies and promote data flow within an entire enterprise. Through the years and in any technology market, security issues have always been looked for as a focus. With the SaaS one being exempt from this situation you are looking at an anomaly when compared to all others from the same cluster, which should serve you as more than enough proof that something is not quite right here. The increasing consumption of cloud-based solutions is a key issue because it brings to mind safely storing sensitive information. This concern is to be addressed on the part of SaaS providers by deploying security measures such as encryption, multi factor authentication and ultimately compliance certificates. This, therefore, gives enterprises assurance of implementing the use of SaaS software and trusting that they are not facing threats with their intellectual property. In addition, the Saas market also looks progression of price models.
The old software entailed a big capital investment upfront, and this is an obstacle for SMEs to enjoy better options. SaaS vendors provide subscription models that have made it possible for organizations to subscribe their software services after some tune, hours, or days. This change reduces entry barriers giving smaller and medium enterprise access to the highly developed scientific software that before needed a significant initial investment. This is because businesses are conducted internationally, allowing SaaS to go global.
Report Attribute/Metric | Details |
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Market Opportunities | SaaS is a product appropriation model that offers a great deal of dexterity and cost-adequacy for organizations, making it an extraordinarily solid alternative for various action plans and enterprises. |
The global software as a service market is estimated to reach a valuation of USD 1267.5 billion by the year 2032, at a CAGR of 18.3% during the forecast period from 2024 to 2032. SaaS, or Software as a Service, is a cloud-based service that delivers software applications over the Internet. The SaaS market's growth is primarily driven by the increasing adoption of public cloud services in large and small-scale companies.
The increasing adoption of Software as a Service (SaaS) by businesses, as a result of the expensive nature of on-premises software deployment, is expected to drive the growth of the market.
Figure 1: Software as a Service Market Size, 2024-2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The new-age trend of integrating artificial intelligence and machine learning technologies with SaaS solutions is making the software as a service market take a giant leap.
SaaS solutions have witnessed several key transformations in their technologies, such as Machine Learning (ML) and Artificial Intelligence (AI), which have been included to enhance operational efficiency and intelligence across several industrial domains. Enterprises across many sectors utilize autonomous innovations to improve their services and products and optimize content through data-driven research to gain insights into users' requirements. Machine learning enables these solutions to enhance operational efficiency and intelligence. Therefore, as AI-based solutions become increasingly important, organizations will require more effective control over software training.
The adoption of artificial intelligence and machine learning is expected to significantly transform this business by enhancing the fundamental characteristics of various software solutions. By integrating software as a service solution along with AI and ML capabilities, it is feasible to customize and automate solutions, improve security, and enhance human potential. Furthermore, in September 2022, Nokia announced its intention to enhance its SaaS solution portfolio by providing more appealing options to Communication Service Providers (CSPs) and companies. The new portfolio aims to streamline the storage and utilization of data, minimize the time required for data management, and enhance the efficiency of repeated processes.
In addition, Saas is a dynamic and adaptable service that is part of a range of cloud computing technologies. It presents numerous problems and opportunities for cloud service providers, users, and varied industrial sectors. The pivotal emerging aspects of Software as a Service (SaaS) will persistently develop and delineate the future of cloud technologies, encompassing its innovation, effectiveness, and commercial worth for companies worldwide. Therefore, the aforementioned variables are anticipated to significantly influence the market throughout the forecast period.
Based on deployment, the Software as a Service market is further sub-segmented into community cloud, public cloud, hybrid cloud, and private cloud. Out of which, the private cloud sub-segmentation owes the major market share. Deploying SaaS applications at the network's edge, combined with a private cloud infrastructure, enhances data control, security, and performance while reducing latency. This approach ensures compliance with regulations and lowers the risk of data breaches. The integration of edge computing and private cloud forms a robust platform for delivering SaaS applications tailored to modern business needs. Furthermore, followed by the private cloud segment, the hybrid cloud segment is poised for significant growth, driven by increasing demand for industry-specific SaaS applications in healthcare, finance, and education. Several key organizations seek customized solutions, such as hybrid cloud, to meet unique industry requirements and regulatory compliance, as demonstrated by recent agreements with Accenture, Kubota, Chubu Electric Power Group, and Infosys.
Based on end-use, the Software as a Service market is further divided into SMEs and large enterprises. Out of these, the large enterprises segment dominates the global market share. Large enterprises benefit from SaaS solutions by gaining cost-effectiveness, scalability, and flexibility. One of the evolving trends in the said market is the adoption of multi-cloud and hybrid-cloud strategies together due to the growing need to manage complex distributed applications across geographies and cloud providers. Apart from this, small and medium enterprises (SMEs) are experiencing significant growth by embracing the on-demand consumption model of SaaS. Cost-effectiveness, accessibility, and scalability make SaaS attractive for SMEs, enabling them to compete effectively, enhance productivity, and stimulate growth.
Based on Industry, the global Software as a Service market is further segmented into retail, IT & Telecommunication, Entertainment, BFSI, Healthcare and Manufacturing. Out of these, BFSI segmentation dominates the global market share. The reason the BFSI segment dominates the market share is the major transformations in the industry that are propelled by emerging technologies and digital platforms disrupting conventional models. Apart from this, cloud-based core banking solutions are gaining popularity for their flexibility and scalability, surpassing on-premises alternatives. These solutions enable financial institutions to swiftly adapt to market changes, scale operations as needed and cut costs. For instance, in June 2022, Aqua Security Software Ltd. launched cloud-native security SaaS in Singapore, serving the wider Asia Pacific and Japan region, which offered government, banking, and regulated sectors comprehensive compliance, cloud-native security, and risk management for efficient data governance.
The global software as a service market is primarily studied across four major regions, namely, North America, Europe, Asia-Pacific and the Rest of the World. Out of which, the North American region dominates the global market share.
The North American region dominates the global software as a service market owing to the presence of major players in the region and the early adoption of technologies like AI, IoT, robots, and the cloud. The region's adoption of software as a service application is influenced by the presence of major SaaS platform suppliers, like IBM Corporation, Oracle Corporation, and Microsoft Corporation. Apart from this, the North American market is being revolutionized by the integration of Artificial Intelligence (AI) and Machine Learning (ML), leading to significant transformations in client services. The region is projected to expand further as a result of increasing developments in the market.
Following North America, the European region also owes a substantial market share due to the advancements in SaaS solutions by the major key players in the region. Along with Europe, the Asia-Pacific region is predicted to exhibit exponential growth rate during the forecast period, owing to the demand for increased resilience and agility across businesses that are likely to adopt cloud solutions.
Key competitors in the global market are prioritizing the expansion of their market share and global reach by implementing key strategies, including merger and acquisition, partnership deals, collaboration deals, joint ventures, business expansion deals, etc. These organizations are procuring small and local firms in order to augment their company presence and extend their consumer base.
Salesforce (U.S.)
Zuora (U.S.)
LinkedIn (U.S.)
Microsoft Inc. (U.S.)
Concur Technologies (U.S.)
Medidata Solutions (U.S.)
Workday, Inc. (U.S.)
Oracle Corporation (U.S.)
IBM Corporation (U.S)
NetSuite Inc. (U.S.)
ServiceNow, Inc. (U.S.)
Google Inc. (U.S.)
February 2023 -
In February 2023, Oracle, one of the largest cloud companies globally, introduced banking cloud services to offer efficient banking services to meet customer demands.
In October 2023, Mambu, a leading SaaS cloud banking platform, is available on AWS Marketplace, a significant move in their decade-long partnership with AWS. Over 200 mutual customers, including N26 and Western Union, leverage Mambu's platform. The addition to AWS Marketplace facilitates financial organizations in starting their cloud journeys and modernizing infrastructure for evolving customer expectations. Chetwood Financial, a UK digital bank, is the first to choose Mambu on AWS Marketplace, enabling rapid scalability and flexible configuration of deposit products.
November 2022 -
In November 2022, IBM Corporation, one of the leading companies globally, launched its New Cloud Mobilization Center called IBM Z to accelerate its hybrid cloud services.
May 2022 -
In May 2022, IBM and Amazon Web Services (AWS) signed a collaboration deal that would allow IBM's software catalog to be SaaS on AWS.
Community cloud
Public cloud
Hybrid cloud
Private cloud.
SMEs
Large enterprises.
Retail IT & telecommunication
Entertainment
Retail
BFSI
Healthcare
Manufacturing
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