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The Software as a Service (SaaS) Market size is estimated to grow at a CAGR of 19.19% between 2022 and 2027. The market size is forecast to increase by USD 313.45 billion. The growth of the market depends on several factors, including such as augmenting the use of mobile apps, increasing the use of AI-enabled SaaS, and the rising need for API connections. SaaS is a cloud service model that involves the hosting of software programs and other associated data centrally. The hosted programs and data are accessed using web browsers over the Internet. SaaS allows users to gain access to the various components and features of software programs for a subscription fee.
This software as a service (SaaS) market report extensively covers market segmentation by deployment (public cloud, private cloud, and hybrid cloud), end-user (large enterprises and SMEs), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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One of the key factors driving the software as a service (SaaS) market growth is the augmenting use of mobile apps. There is increasing popularity for mobile apps among businesses and other sectors. There is increasing use of mobile apps in e-commerce, payments, food delivery, healthcare, and other purposes due to the rising penetration of smartphones in emerging countries. Additionally, there is increasing adoption of digitalization across education sectors which optimizes the teaching and learning processes.
Furthermore, the main advantage of the integration of digitization in the education sector is that it offers students and teachers better access to resources. For example, students are able to access study materials on their smartphones, laptops, or tablets anywhere and at any time by leveraging educational apps. Additionally, there is an increasing implementation of BYOD policy in various schools in several regions which enables students to use their own devices, such as smartphones, laptops, and tablets, in schools. Hence, such factors are expected to positively impact the SaaS market growth. Therefore, it is expected to drive market growth during the forecast period.
A key factor shaping the software as a service (SaaS) market growth is the rising use of micro SaaS. There is an increasing adoption of micro SaaS especially by enterprises or niche markets that focus on small products. The main advantage of micro SaaS is that it enables enterprises to focus and solve problems by utilizing minimal resources. Most of the Micro SaaS products are mainly complementary or add-ons to existing platforms and developments.
Additionally, there is an increasing adoption of micro SaaS among customers as they pay a recurring subscription fee only for access to a hosted version of the app. Several market players are increasingly focusing on offering micro SaaS products to sustain the intense competition in the market. The main advantage of micro SaaS products is that it helps to minimize the CAPEX of enterprises. Hence, such factors are expected to drive market growth during the forecast period.
Increasing acceptance of PaaS is one of the key challenges hindering the software as a service (SaaS) market growth. There is an increasing use of SaaS products and it offers access to complex applications and needs low management overhead. However, it significantly challenging for some IT companies to integrate SaaS tools with their existing IT tools. Several IT companies utilize connectors and adaptors in order to integrate traditional applications with SaaS.
However, besides the extensive use of connectors for integration, it is still challenging for some IT departments. One of the main issues regarding the integration is that the access control and monitoring settings that are applicable in traditional software are not successfully carried forward to SaaS applications. Hence, such challenges are negatively impacting the SaaS market growth. Therefore, such factors can hinder the market growth during the forecast period.
The public cloud segment is estimated to witness significant growth during the forecast period. Some of the computing functionalities of f public SaaS are complete software programs or applications, which are made available to customers over the Internet. Additionally, it offers IT services over the Internet or through virtualization. As a result, these IT services are provided by third-party providers. Besides SaaS services, several market players are offering IaaS and PaaS services such as bandwidth, network connections, Internet Protocol (IP) addresses, and storage, which allows SaaS solutions to run on the IaaS platform of the companies.
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The public cloud segment was the largest segment and was valued at USD 94.63 billion in 2017. Additionally, these market players also offer OS platforms or infrastructure, which can be utilized for software testing. Some of the key SaaS solutions that are offered to customers include e-mail, sales management, CRM, financial management, human resource management (HRM), billing, and collaboration. There is increasing use of the public cloud due to its elasticity and scalability, which are ideal for IT-enabled services. Microsoft Office 365 and Slack IPO are some of the prime examples of public cloud solutions. Several market players offer public cloud offer software programs and applications including ERP, CRM, and HRM, which can be used by enterprises. Some of the key advantages of public cloud services are low initial investments, high availability and multi-tenant capabilities, reduced complexity, flexible pricing, and cost agility. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
The increasing adoption of cloud computing by large enterprises segment increases market growth. There is increasing adoption of SaaS across large enterprises as these enterprises have complex IT requirements. Some of the key advantages which SaaS offers to large enterprises include low cost, no maintenance, resource optimization, and scalability, to address their requirements. The main application of SaaS in large enterprises is that it allows them to extend their IT infrastructure swiftly and efficiently without having to invest in expensive hardware and software. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 54% 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. One of the main factors which are significantly contributing to the growth of the software as a service market in North America is due to the increasing demand for cloud computing services, especially in the US.
Additionally, factors such as the availability of technologically advanced infrastructure and the presence of a large number of cloud service providers (CSPs) such as Microsoft, Salesforce, Oracle, and Adobe based in the US are positively impacting the market growth in the region. Furthermore, there is increasing investment by several enterprises in IT to implement enterprise applications in order to streamline their processes. Hence, such factors are expected to drive market growth in the region during the forecast period.
In 2020, during the COVID-19 pandemic, the growth of the global software as a service market witnessed significant growth due to the shift in numerous trade operations online, leading to the widespread use of cloud computing for better storage of data in North America. However, in 2021, the initiation of large-scale vaccination drives?lifted the lockdown and travel restrictions, which led to increased funding for the development of SaaS infrastructure. Such factors are expected to drive the market during the forecast period.
The software as a service market industry 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 growth strategies.
Global Software as a Service (SaaS) Market Customer Landscape
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.
Adobe Inc: The company offers software as a service such as Adobe creative cloud.
Alphabet Inc: The company offers software as a service under the brand Google LLC.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
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.
The software as a service (SaaS) market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Software As A Service (SaaS) Market Scope |
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Report Coverage |
Details |
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Page number |
173 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 19.19% |
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Market growth 2023-2027 |
USD 313.45 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
17.36 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 54% |
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Key countries |
US, Japan, China, UK, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
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., and Zendesk Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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