Global software as a service market is projected to witness a CAGR of 18.45% during the forecast period 2024–2031, growing from USD 208.1 billion in 2023 to USD 806.4 billion in 2031F. The cloud computing world is advancing towards work-from-home (WFH) jobs, fueling the demand for the software as a service market at the global level. Software-as-a-service has low entry barriers and witnesses an upsurge in demand due to its scalability and flexibility. Subscription-based models are gaining traction since they offer convenience, personalization, and sustainability. Furthermore, businesses can attract recurring revenue by encouraging customer success and improving buyers’ retention. The recent digitalization trend also promotes global software as a service market growth. Furthermore, integrating artificial intelligence and machine learning results in businesses elevating their business opportunity to the next level by providing custom SaaS tools. Henceforth, the changing work trends and tech evolution fuel rapid software as a service market expansion at the global level.
The subscription-based model has been gaining traction in recent years as renting is more affordable for end-users to avail themselves of solutions by major market players such as Adobe, Salesforce, Dropbox, and others. The major advantage of SaaS provided as a subscription model is that it offers businesses the ability to generate predictable and recurring revenue streams across various sectors. Furthermore, businesses are providing curated options in subscription models specially designed to target customer segments to capture a large portion of global software as a service market share.
For instance, in August 2023, Paddle, a payments infrastructure provider for SaaS firms, launched Paddle Billing, a collection of APIs and services designed to improve billing capabilities. It also enhances Paddle’s basic Merchant of Record (MoR) business. It enables hybrid billing, allowing SaaS firms to charge subscriptions using an invoice and a credit card, providing a consistent client experience.
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Integration with Artificial Intelligence Contributing to Global Software as a Service Market Growth
Implementing artificial intelligence in the software as a service market is a significant technological advancement fueling the growth in the industry as it offers predictive analytics, automates routine tasks, and provides intelligent insights improving the overall efficiency of businesses and revolutionizing the traditional way of operations. Artificial intelligence is integrated along with machine learning to analyze big data to make better predictions and enhance decision-making capabilities. Machine learning is used by Einstein AI, which Salesforce developed to help sales representatives identify potential leads and make customized recommendations and insights. Artificial intelligence is also used in SaaS through natural language processing (NLP) technology. NLP technology is used to comprehend and interpret human language, such as an AI-powered virtual assistant by Microsoft’s Cortana, which can schedule meetings, send emails, and provide reminders.
For instance, in February 2024, Siemens released Senseye Predictive Maintenance, a new generative AI functionality in its prediction maintenance solution. This development was introduced to make predictive maintenance more understandable and conversational. This new generative AI feature in the Software-as-a-Service solution combines generative AI with machine learning to build a strong, complete predictive maintenance solution that utilizes both technologies’ capabilities.
Mobile-First SaaS and Vertical SaaS Solutions to Boost Global Software as a Service Market Demand
The software as a service market is witnessing a rapid drift towards mobile-first solutions with the rising number of mobile devices. SaaS companies are emphasizing creating more applications specially designed for mobile devices. Reliance on smartphones and tablets for company operations is also experiencing growth with the increasing need for seamless mobile access to SaaS solutions, contributing to the global software as a service market size. Apart from this, vertical SaaS developers are focusing on software tailored to the needs and workflows of specific industries. Industry-specific knowledge provides a better understanding of a certain industry’s difficulties that allows the trend to design customized solutions to cater to the pain points of that specific industry. Vertical SaaS emphasizes the benefits of the businesses in the field from the level of customization and industry expertise, as it allows businesses to employ software designed specifically for their operations.
For instance, in September 2023, Mobly, a mobile software company, unveiled its latest application for B2B enterprises which focuses on enhancing lead collection speed and accuracy. Mobly allows searching for contacts by name and company and scans a badge or business card at any event by the use of AI-powered optical character recognition (OCR). It also enhances the lead information and seamlessly synchronizes the profiles and activity data with CRM or any marketing automation platform, shortening the time for a qualified lead. A process that used to take firms days or weeks can now be completed in seconds. The Mobly app is now accessible for Apple iOS and Google Android users.
North America Holds a Significant Share of the Market
North America is the most prominent region contributing to the growth of the global software as a service market share. The main factor behind the continuous growth of the market is the rapid shift in remote and hybrid work culture accelerated after the COVID-19 outbreak. This remote culture developed the demand for SaaS products to cater to the needs of the industries to manage remote teams and keep operations running smoothly and efficiently. Another factor was the necessity of better digital collaboration tools which enabled managers and employees to engage in proper communication to improve the workflow of the operations internally and externally. Furthermore, SaaS adoption became more prevalent in industries such as BFSI, manufacturing, and retail sectors as the era of digitalization across diverse sectors.
BFSI Sector Fostering Revenue in Global Software as a Service Market Share
SaaS is utilized in the BFSI sector since it offers superior flexibility to scale up or down depending upon the demand, thereby enabling the BFSI companies to efficiently add or remove features, users, and modules as required. The scalability achievement due to the utilization of SaaS in the BFSI sector results in the organizations staying competitive and agile in rapidly changing market dynamics. Thus, due to the above-mentioned benefits the deployment of SaaS is increasing in the BFSI sector. Furthermore, the integration of AI services with SaaS is also fostering the deployment of SaaS in the banking sector.
For instance, in April 2024, Oracle Corp. unveiled Oracle Financial Services Compliance Agent which is an artificial intelligence-powered cloud solution designed to assist the banking sector in combating anti-money laundering (AML) and the remaining compliant more efficiently. The tool allows institutions to conduct low-cost hypothetical scenario testing, alter thresholds and restrictions, and detect fraudulent actions. Compliance agents may evaluate the threat profile of new financial products, proactively analyze and reduce risks associated with vulnerable typologies, and make more cost-effective, quicker, and evidence-based risk modeling choices.
Future Market Scenario (2024–2031F)
According to the global software as a service market analysis, advancement in the field of artificial intelligence will attract more demand in the software as a service market as AI capabilities offer businesses to gain better values from their data, help to automate and customize services to cater specific industry needs, enhance the security level, and supplement human capacity. Along with automation in the software as a service market, businesses may rely on the automation tool to handle the misconfiguration issue and minimize data breaches and cybersecurity risks. Vertical SaaS may gain traction as it is completely customizable, targeting customers within a specific industry.
Report Scope
“Software as a Service Market Assessment, Opportunities and Forecast, 2017–2031F”, is a comprehensive report by Markets and data, providing in-depth analysis and qualitative and quantitative assessment of the current state of global software as a service market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2024 and 2031F. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.
In the ever-evolving landscape of technology, Software as a Service (SaaS) has emerged as a pivotal player, revolutionizing the way businesses operate and consumers engage with software solutions. The global SaaS market is experiencing unprecedented growth, fueled by a myriad of factors including digital transformation initiatives, the rise of remote work culture, and the increasing demand for scalable, cost-effective software solutions. Let’s delve into the current trends and opportunities shaping the global SaaS market.
The Rise of Digital Transformation
In an era where agility and adaptability are paramount, organizations across industries are embracing digital transformation to stay competitive. SaaS solutions offer the flexibility and scalability necessary to navigate this transition seamlessly. From cloud-based collaboration tools to advanced analytics platforms, SaaS empowers businesses to streamline processes, enhance productivity, and drive innovation.
Remote Work Culture Driving Adoption
The COVID-19 pandemic accelerated the shift towards remote work, highlighting the importance of cloud-based technologies like never before. SaaS applications enable remote teams to collaborate in real-time, access critical data from anywhere, and maintain seamless communication channels. As remote work continues to become the new norm, the demand for SaaS solutions is poised to soar, presenting immense opportunities for vendors to cater to evolving workforce needs.
Focus on Industry-Specific Solutions
As the SaaS market matures, there’s a growing emphasis on industry-specific solutions tailored to meet the unique requirements of different sectors. From healthcare and finance to manufacturing and retail, organizations are seeking SaaS providers that understand their specific challenges and can deliver targeted solutions. Vendors that specialize in niche markets have a significant advantage in catering to these specialized needs and driving innovation within their respective industries.
Integration and Interoperability
In today’s interconnected digital ecosystem, seamless integration and interoperability have become critical factors driving SaaS adoption. Businesses are looking for solutions that can seamlessly integrate with their existing tech stack, ensuring smooth data flow and eliminating silos. SaaS providers that offer robust APIs, pre-built integrations, and interoperable platforms are well-positioned to capture market share and deliver greater value to customers.
Security and Compliance
With the increasing reliance on cloud-based solutions, security and compliance have emerged as top priorities for businesses adopting SaaS. Vendors are investing heavily in robust security measures, encryption technologies, and compliance frameworks to safeguard sensitive data and ensure regulatory compliance. Building trust through transparent security practices and stringent data protection measures is essential for SaaS providers to gain the confidence of enterprise customers and drive widespread adoption.
The Role of Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) and Machine Learning (ML) are reshaping the SaaS landscape, empowering organizations to extract valuable insights from vast amounts of data and automate repetitive tasks. SaaS platforms infused with AI capabilities offer enhanced personalization, predictive analytics, and automation, driving efficiency and innovation across various industries. As AI and ML technologies continue to evolve, SaaS providers must stay at the forefront of innovation to deliver cutting-edge solutions that meet the evolving needs of customers.
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The global Software as a Service (SaaS) Market research report, published by Value Market Research, is designed to offer various market framework such as market size, portion, trends, growth path, value and factors that impact the current market dynamics over the forecast period 2020-2027.
Most importantly, this report also provides the latest significant strategies adopted by major players along with their market share.The research report also covers the comprehensive profiles of the key players in the market and an in-depth view of the competitive landscape worldwide.
This section consists of a holistic view of the competitive landscape that includes various strategic developments such as key mergers & acquisitions, future capacities, partnerships, financial overviews, collaborations, new product developments, new product launches, and other developments.Get more information on "Global Software as a Service (SaaS) Market Research Report" by requesting FREE Sample Copy at https://www.valuemarketresearch.com/contact/software-as-a-service-saas-market/download-sampleMarket Dynamics The global software as a service (SaaS) market is projected to grow at a double-digit rate during the forecast period.
Rapid digitalization, flourishing businesses, and growing awareness about the benefit of using SaaS drive the global demand.
Businesses are seeking a paradigm due to a shift in operations and priorities, especially in developing economies of the APAC region.
Also, it helps an organization minimize its costs and maximize productivity.
