The future for Software as a Service (SaaS) is looking brighter than ever! In this piece, we'll examine what a few popular forecasts have to say. We'll also take a look at the pioneering countries and companies leading the way.
The State of SaaS in a Few Years
Syndicated research firm Market Research Future (MRFR) recently published a report titled "Software as a Service Market Research Report- Forecast 2022." It details what we can expect to see in the SaaS market over the next few years. The company classifies SaaS as "a delivery model of software through the cloud in which software and all the associated data are hosted centrally and accessed by clients through a web browser."
MRFR expects the global SaaS market to grow to a value of $117 billion by the end of 2022, with an annual growth rate of approximately 21%. Renowned research firm Gartner found results that put it right on track to reach this. The company expects cloud revenues to total $278 billion by 2021, with SaaS remaining the largest segment of this market — by 2019, it will comprise 17.8% of the total cloud market for a value of $85.1 billion.
Craig Roth, Gartner's Research Vice President, elaborates on this growth: "The increasing adoption of SaaS applications and other cloud services impacts the management, dissemination, and exploitation of enterprise content. Organizations are steadily -- but not exclusively -- shifting their content environments to SaaS."
Other research firms had even more optimistic estimates for the future of SaaS. Market intelligence provider IDC Research believes the sector will surpass $112.8 billion by 2019. And analytics company Transparency Market Research says the market will reach $164.29 billion by 2022.
Great Reasons for Growth
So, what's the main reason for this sharp increase? Demand. Regardless of domain, organizations from all industries desire better data management and analysis tools for a variety of reasons. SaaS is versatile in the value it can deliver. Enterprises and startups alike are already leveraging various SaaS platforms to analyze market reach, streamline workflow, and even enhance team collaboration through meetings!
Software vendor BetterCloud recently conducted a survey of over 1800 IT professionals. 73% of them said that almost all of their applications will run via SaaS by 2020, with 38% claiming this is already the case. When you weigh the advantages against traditional software implementations, it's easy to see why.
SaaS often results in more cost-effective options due to its lower barrier for entry and the burden it removes off of IT. Not only is it more accessible and agile, but it's also much more customizable; companies can often tailor solutions to solve specific needs while maintaining greater control over their technology stack and data.
Where's the Growth, and Who's Driving It?
MRFR found the U.S., Canada, the U.K., Germany, China, France, Japan, India, and Italy to be the biggest contributors to the global growth of SaaS.
The firm identified North America as the leader for the next following years: "Currently, North America is dominating the market of Software as a Service and by looking at the current scenario, it is expected that North America will continue to dominate the market throughout the forecast period." Europe came in second, and Asia-Pacific was recognized as the fastest growing market due to the startup environments in China and India.
MRFR also found major companies like IBM, Salesforce, Oracle, Netsuite, Google, Microsoft, and LinkedIn to be the current top players in the market. In terms of pure growth, the SaaS 1000 Index currently holds CultureIQ, AppZen, Guild Education, Pipefy, and many more as the top companies expanding right now.
A Bright Future
While projections vary, one thing is certain: the global SaaS market will experience unprecedented growth over the next few years. Providers that stay adaptable to customers' needs could secure a spot in a market that will only keep flourishing with time.