Eye-Opening SaaS Statistics Every Business Should Know

Quick Overview: Welcome to our blog on SaaS market trends and statistics! Explore trends like AI integration, automation, and subscription models that are transforming software consumption. Unveil key statistics on adoption rates, market size, and future projections. Whether you're a tech enthusiast or an entrepreneur, join us for insights into the evolving SaaS landscape.

“Don’t find customers for your products; find products for your customers.”

- Seth Godin, entrepreneur, author, and speaker

SaaS (Software as a Service) has emerged as a transformative delivery model that reshapes how businesses operate and consumers engage with technology.

Just imagine a market growing like a redwood forest after the rain – dynamic, expansive, and filled with possibilities. The growth of SaaS is no different; it’s booming, with businesses of all sizes turning to subscription-based software solutions for their operational requirements.

In this research-driven article, we are going to discover the latest SaaS trends and unveil interesting statistics that define the SaaS landscape. We will also discover how subscription-based models are forcing enterprises and startups to adopt software development services.

Furthermore, we are going to explore the impact of AI and automation on SaaS efficiency and customer experience. We'll also navigate through key metrics—like adoption rates, market size, and future projections—painting a vivid picture of this ever-evolving industry.

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Join us as we embark on this journey through the SaaS statistics, which uncover insights that will inspire and inform. Whether you're a tech enthusiast, an entrepreneur, or simply curious about the future of software, this blog promises to be your trusted companion in understanding SaaS trends and statistics.

Let's dive in!

SaaS Statistics [Editor’s Choice]

• As per the 2024 State of SaaS Growth report, organizations globally used 371 Software as a Service (SaaS) applications on average in 2024. Businesses have been using an increasing number of SaaS applications since 2015.
• The Software as a Service (SaaS) market is expected to generate $282.2 billion in 2024. The SaaS industry is predicted to have a market volume of $344 billion by 2027.
• With a $262.3 billion market valuation as of January 2024, Salesforce was the biggest SaaS firm listed on the U.S. Stock Exchange.

• Around 78% of small businesses have invested in SaaS development solutions.

• As of January 2024, the average yearly churn rate for SaaS companies was 5.2%.

• According to Better Cloud, in 2022, workplaces powered by SaaS were around 30% more efficient than other types.

• Compared to Q3 2022, machine learning (ML) and AI grew by 85% in Q3 2023.

• The US has the largest SaaS market share worldwide, with around 17,000 SaaS companies.

• U.S. SaaS industry to grow to $225 billion by the end of 2025.

• The expected CAGR for the global SaaS market from 2023 to 2030 is 13.7%.

• More than 80% of companies use at least one SaaS application for their seamless operations.

• SaaS development is favored by 70% of Chief Information Officers (CIOs) because of its scalability and agility.

• With a CAGR of 27.5% between 2021 and 2028, the SaaS industry is expected to reach $716.52 billion.

• 70% of the software used by the organization is in the form of SaaS apps.

• As per Gartner, between 2017 and 2022, SaaS spending is expected to increase 241%.

• Microsoft ($2.3 trillion) was the biggest SaaS provider as of 2023 in terms of market capitalization.

• Out of the 100 technology executives surveyed, 64% of them plan to deploy a SaaS management tool within the next two years, with 69% of them using it to improve current processes.

• Gartner predicts 2023’s $200 billion SaaS spending will rise by 18% in 2024.

• An average SaaS business has 36,000 clients.

• Throughout the past seven years, the SaaS sector has expanded at a 500% annual rate.

• SaaS makes up a significant portion of total product revenue spend in major application categories:

  • 88% of desktop and collaboration apps
  • 83% of e-purchasing
  • 76% of CRM

Top SaaS Statistics: Overview

• At a CAGR of 18.7%, the size of the worldwide Software as a Service industry is expected to increase from $273.55 billion in 2023 to $908.21 billion by 2030.
• By 2032, the enterprise software industry is projected to reach a valuation of $610.09 billion worldwide.
• Intuit, Salesforce, and Adobe are the three SaaS companies with the highest market capitalization.
• With a 33% increase, IT and security departments experienced the highest percentage gain in SaaS app usage.
• Postman is now the most-valued Indian SaaS startup.

• SaaS portfolios increased by 32% in 2023 compared to 2021.
• Public cloud investment is expected to surpass 45% of all enterprise IT spending by 2026.
• As per McKinsey, marketing and sales remain the highest expenses of SaaS companies, amounting to 50% or more of their revenues.
• Since 2020, end users will have paid more than $438K for SaaS subscriptions.
• As per the report, the cloud market index EMCLOUD surpassed the Dow Jones, S&P 500, and MASDAQ, growing by 524% between 2013 and 2023.
• According to Gartner’s forecast, worldwide end-user spending on cloud application services (SaaS) will exceed $232 billion in 2024 — up from $197 billion in 2023.

SaaS Growth Key Statistics

Undoubtedly, the SaaS industry is growing globally, irrespective of industry size and platforms. Let’s read the SaaS growth statistics in this section.

• Private SaaS funding in Europe is seeing 3.2x year-over-year growth.
• In 2024, there were approximately 9,100 Software as a Service (SaaS) companies in the United States. Together, they had around 15 billion customers worldwide, and 3 billion customers worldwide.
• The remaining top four countries are the United Kingdom (1,500), Canada (992), Germany (840), and India (711).

• Between 2020 and 2025, it is anticipated that the SaaS sectors in China, India, and Brazil will expand by more than two times.

• In terms of SaaS market growth from key markets, Germany is predicted to see the most significant increase, from €6.85 billion to €16.3 billion by 2025.

• Over 337 SaaS unicorns and 15 decacorns (worth over $10 billion USD) were present in the US in 2021.

• On G2, the top 3 rated SaaS apps for “Best Software Products 2023” are Zendesk, Freshping by Freshworks, and HubSpot Marketing Hub, respectively.

• An additional $100,000 in monthly recurring revenue (MRR) is generated for every $1 million invested in customer acquisition costs (CAC), indicating a greater return on MRR for comparable sales and marketing expenses.

• Every workplace will be SaaS-powered in the upcoming years. The report from BetterCloud of over 750 respondents' states that the enterprise served can be categorized into three segments:

  • SaaS-Powered Workplaces: 96% of the apps used are powered by SaaS.
  • Transitional Workplaces: 49% of the apps are SaaS-based.
  • Traditional Workplaces: 13% of apps are SaaS-based.

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• The SaaS sector shifted its emphasis from growth to sustainability last year. The leading SaaS company with an annual revenue of between $1 million and $30 million grew by 62.1% in 2022 (compared to 93.4% in 2020 and 78.9% in 2021).

• Growth for SaaS companies with annual revenue rates above $1 million accelerated somewhat in Q1 of this year.

SaaS Usage Statistics

Irrespective of the industry, business objectives, or company scale, there is always a user-friendly and cost-effective SaaS options available.

Furthermore, companies are increasingly acknowledging the importance of SaaS solutions in enhancing productivity and gaining a competitive advantage. It is hardly surprising that SaaS solutions have surpassed on-premises solutions in popularity.

• An average organization uses around 110 SaaS applications for its operations.
• 78% of small businesses have invested in SaaS solutions. SaaS applications will benefit businesses in many ways.
• The number of SaaS applications that businesses use varies based on how many people work there.

• Around 45% of businesses (small and medium-sized) have most of their applications hosted on cloud servers.
• By 2025, SaaS is expected to grow by 85% of software used by the average companies, up from 70% at present.
• SaaS companies lose 13% of their clients yearly due to poor onboarding experience.
• 84% of small and medium-sized companies find it challenging to use new SaaS solutions.
• Over 25% of business apps and platforms that 79% of tech leaders use are Software as a Service (SaaS).

• By 2025, it is estimated that the market for CRM alone will reach $60 billion. The most widely used SaaS applications are accounting, content management systems (CMS), and customer relationship management (CRM).
• It is estimated that 14 billion people utilize SaaS solutions worldwide.
• The productivity segment is anticipated to expand by 10.6% CAGR from 2022 to 2028 as more businesses shift to remote work.
• Within the SaaS industry, enterprise software accounts for a staggering 70% of market revenue; this development is attributed to the rise in cloud-based workplaces.
• The average business spends around $3,500 per employee on SaaS tools.
• SaaS applications have a 95% adoption rate; it grew from 71% in 2018 to 95% in 2023.

Below is a list of other technologies that organizations have adopted:

• SaaS Applications- 95%
• Social Media- 79%
• Mobile Payments- 72%
• IaaS Environments- 67%
• PaaS Environments- 65%
• Internet of Things Platforms- 40%
• DevOps- 35%
• Big Data Environment- 25%
• Containers/Docker Images- 15%
• Blockchain- 14%

SaaS Pricing Statistics

SaaS provides items to users over the cloud on a pay-as-you-go, monthly, or annual subscription. On the other hand, on-premises software applications require upfront payment and setup.

One of the key benefits of SaaS is this approach, which allows users to pay for the service only when needed and is flexible for both individuals and organizations.

• 84% of SaaS companies provide prices ranging from low to high, while 38% charge based on how the program is used.
• Merely 9% of businesses provide a high to low range.
• 46% of companies employ the "per user" pricing model.
• Of all SaaS vendors, 44% provide a free trial. Of them, 41% provide a 30-day trial and 18% provide a 14-day free trial.
• 17% of SaaS providers use a freemium pricing model. And only 16% of the companies have a Cost Calculator on their websites.
• 41% of SaaS companies include a pricing list on their websites.
• Regarding pricing, 39% of SaaS companies use a value-based approach, while 24% base their pricing on competitors and 10% base it on cost.

• Most of the businesses are underpriced in their early stages. On average, companies that enter the expansion stage experience an approximate 50% rise in deal size.
• Merely 6% of SaaS organizations carry out appropriate customer-based price research. While 48% undertake no pricing research at all, 45% only conduct cursory market research.
• Just 8% of SaaS organizations never examine their price, compared to 43% who do so more than once a year, 34% who do it once a year, and 15% who do so once every two to three years.

• 78% of SaaS companies follow product-led growth strategies and offer potential customers free plans or trial periods.
• Up to 64% of companies are looking to switch to a new pricing strategy.
• Approximately 46% of SaaS businesses use pricing pages targeting various service categories or market niches.

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Regional SaaS Statistics

Similar to the implementation of SaaS, the distribution of SaaS-producing companies is diverse and global. Therefore, even if the USA is the center of the SaaS production business, there are new local SaaS marketplaces that are rising and making their impact on the market.

• With 17,000 SaaS businesses, the United States leads the world in this category by more than 8 times.
• Both Canada and the United Kingdom have 2,000 companies each, placing them second.

• More SaaS users—59 billion—live in the US than in all other countries combined.
• India is the largest country in Asia, with two billion users and 994 SaaS companies.
• Over the last ten years, China's SaaS market has continuously increased in size. In 2020, it brought in roughly RMB 50 billion.
• Since 2017, the Japanese SaaS market has grown steadily year over year and has reached a valuation of more than $1.5 billion by 2023.
• SaaS usage is booming in Africa and the Middle East, where it is predicted to expand at a compound annual growth rate of 22.4% between 2021 and 2026.
• Latin America is expected to experience a CAGR of 21.9% between 2020 and 2025.
• With a CAGR of 18.4%, the European SaaS market is projected to reach $60.36 billion by 2025.
• It was estimated that the UK SaaS market would grow to double its value by 2025, from $7.5 billion in 2020. The SaaS markets in China, India, and Brazil are all growing similarly.
• By 2025, major markets are likely to witness the most significant growth in the SaaS industry, with Germany leading the pack. Its market is predicted to increase by nearly three times in only five years, from €6.85 billion in 2020 to €16.3 billion in 2025.

Integration of AI in SaaS Software

AI development and implementation are among the most important trends in SaaS product development. This promises to continue for many years to come.

Let’s read AI statistics for the SaaS industry.

• By 2030, it is anticipated that the AI SaaS market will rise from US$73.8 billion in 2020 to US$1.5 trillion.
• Currently, 35% of SaaS organizations use AI, and 42% more want to do so in the future.
• It is expected that AI-native IT companies will surpass other cloud services to reach US$1 billion ARR 50% faster.
• Generative AI features are integrated into the offerings of 38% of SaaS enterprises.
• 15% of SaaS providers now provide deep learning-based products.
• In 2023, AI SaaS startups invested $43.0 billion.

In general, Artificial Intelligence (AI) is revolutionizing the SaaS industry. AI is continuously enhancing its architecture to include automation, security, and personalization.

SaaS Security and Compliance Statistics

Every SaaS application consists of users’ sensitive data and information. Because of this, they become targets for cyber criminals and threats who wish to damage and steal that information.

The following stats will shed light on the security issues that you should be aware of.

• According to Cloud Security Alliance, in the last two years, a SaaS security issue was reported by 55% of security executives. Compared to 2021, this is an increase of 12%.
• Data leakage is the most frequent security issue that 58% of IT and security professionals report experiencing. This is closely followed by malicious apps (47%), data breaches (41%) and ransomware (40%).
• 65% of SaaS apps in 2022 were unsanctioned, meaning users downloaded them without IT's consent or knowledge.
• According to 47% of companies, they don't have enough resources to handle SaaS at scale.

• SaaS misconfigurations cause as many as 63% of organizational security problems.
• 43% of organizations surveyed are able to link a SaaS misconfiguration to at least one security issue.
• As per the 35% of companies that responded, the primary issue with SaaS misconfigurations is that too many parties have access to change SaaS security settings.
• Only 46% of the studied firms had the bandwidth to check for SaaS misconfigurations monthly or less frequently, and 5% never checked at all.
• 43% of IT professionals polled said they had deployed a SaaS application that stores confidential data in the past year.
• Surveyed IT professionals report that 42% of them struggle to secure SaaS user activity.
• 22% of security issues are related to insider threats, which occur when former employees still have access to SaaS systems.

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The Future of SaaS is Here; Implement It with Our ExpertiseIn conclusion, the SaaS market is a dynamic spectrum of innovation and growth, reshaping businesses worldwide. As we've explored the SaaS trends and statistics, one thing is clear: SaaS is here to stay, driving efficiency and scalability.At Radixweb, we stand at the importance of SaaS application development, empowering businesses with custom solutions tailored to their needs. With our expertise in SaaS, backed by years of experience and a passion for technology, we are committed to helping businesses thrive in this transformative era.Join us in embracing the future of software, where SaaS is not just a product but a catalyst for your business’s growth and success.Want even more interesting technologies-related statistics and facts? Check out Artificial Intelligence Statistics, Agile Statistics, Front End Statistics, Back End Statistics, and JavaScript Statistics from Radixweb’s Facts and Figures library.