May 23, 2024

It’s in the numbers – SaaS is changing how we think about and do our jobs. A large-scale revolution has occurred in the corporate world, as over 90% of businesses now run on SaaS applications. It’s worth noting that global SaaS spending reached $151 billion in 2021. We’re at the end of 2023 now.

Remote work has become common as digital transformation is taking its speed. Who’s leading the charge? As much as 75% of SaaS users are comprised of small and medium businesses. Affordable and flexible SaaS solutions are vital for scrappy “start-ups” for leveling the competitive landscape vis-a-vis larger competitors.

This has cemented SaaS as a default choice for business software and has made it appear that there is no slowdown in the juggernaut industry. Over the coming years, expect a spurt of development as many firms, both large and small, move to the cloud. SaaS, in essence, is transforming how organizations work. This much is certain: this revolution has just begun. The following are more than fifteen interesting SaaS statistics and facts that prove the rise of SaaS.

SaaS Statistics to know today

Key SaaS Statistics

1. The SaaS Industry is Worth Roughly $195 Billion.

Since its inception in the 60s, the SaaS industry has been increasing globally. However, the industry has seen massive value growth in the last two decades. Interestingly, projections show that the industry will continue to increase in sheer size. From 2017 to 2019, the industry grew from 44 to 85 billion dollars, indicating a massive growth stop. The following year, it expanded by an additional 30 billion dollars. In 2021, the industry expanded by an extra 50 billion dollars in revenue, recording a $165 billion market size. Also, in 2022, the search industry expanded by 21 billion dollars, registering $186 billion by the year’s end. Experts predict the industry will record 250 billion dollars in 2025 following this upward trend.

2. The US Has the Most SaaS Globally.

The United States has the largest economy globally, which makes it normal for most SaaS companies worldwide to emerge from it. Moreover, the volume of the SaaS industry in the United States records a staggering value, much larger than any other country globally. Statistics reveal that the US SaaS economy is worth about eight times more than any other country. According to the research, the US SaaS industry is projected to expand from $108 billion in 2022 to about $225 billion by the end of 2025. Following the US is the United Kingdom, which has a total value of $14.5 billion. In a similar development, Germany is projected to record $16.3 billion by 2025, while France should record $11.05 billion by 2025. 

3. Precisely 70% of Business Software is now SaaS.

Across the globe, firms are increasingly capitalizing on SaaS platforms to get the digital solutions they require. This is inevitable as the virtual revolution continues, and worldwide solutions are needed. Therefore, the result is that 70% of company software solutions are now SaaS programs. Companies use these SaaS solutions because they are more effective and are typically a cheaper solution for businesses. Usage statistics back up this figure, revealing that 2015, the average firm used 8 SaaS applications. The following year, the figure had grown to 12 applications, and in 2017, the number increased to 16 SaaS software programs. Amazingly, this figure has currently grown to 80 SaaS apps per company. 

4. The Biggest Challenge For SaaS is Encryption.

SaaS apps are digital solutions hosted over the internet, which can become challenging. This implies that they are prone to data breaches and the theft of confidential information. A recent study revealed that 38% of those individuals who responded claimed to be highly concerned about security issues, especially about the encryption used by the service provider. The main reason for this concern was the data encryption and how available/secure the process of storing and managing encryption keys locally was. Of the respondents, 37% of them were bothered about this. The research further revealed that businesses were concerned about whether data encryption was strong enough and where it was stored or managed. It is worth noting that a few respondents were concerned about compatibility for hardware modules, regardless of whether they were stored on the cloud or were generated locally. 

5. Large-scale Companies Use More SaaS Solutions.

Larger companies don’t necessarily require more software solutions than smaller businesses. In many situations, these companies use less than they can afford to build apps that cover numerous functions. Moreover, a recent study by BetterCloud revealed that this wasn’t typically the case. Instead of having unique special SaaS applications written for a company, larger firms use what is currently available. In addition, the study found that firms with more than 1,000 employees typically have only 150 SaaS applications. Companies with less than 50 employees only used an average of 16 applications. On average, companies with about 50–99 employees used 24 SaaS applications, while those with 100–499 workers used a more impressive 47 applications. However, that doesn’t compare to companies with more than 1,000 employees. 

6. SaaS is Based in the United States and Has 14 Billion Customers Worldwide.

Recent numbers related to company numbers date from 2021. The research found that the total number of worldwide users belonging to US-based SaaS companies was more than 14 billion. This reveals how popular US-based Software-as-a-Software companies are, but it signifies the number of companies worldwide.  Interestingly, 14 billion is almost twice the number of individuals alive on the planet now. Recent figures reveal that this trend continues as 56.67% of worldwide SaaS companies are in the United States. A similar research further revealed that there are more than 30,000 SaaS firms globally, with the United States accounting for about 60% of the population. 

7. 38% of Companies Only Use SaaS Software.

This statistic reveals that the SaaS industry constantly expands globally as time progresses. Many businesses are turning to using SaaS solutions, as they are typically cheaper, more accessible, portable, and more effective than other alternatives. Interestingly, this SaaS offers all the information both employees and companies require, regardless of their locations across the globe. 

8. 86% of Companies Running SaaS Have Experienced Higher Employee Engagement.

Recent studies show that 71% of companies are using SaaS solutions to enhance their Information Technology systems and the rate at which their bugs are mitigated. The research also estimated that about 63% of companies select SaaS because they appreciate its versatility. In addition, 58% of companies are grateful for the fact that the application is ever-ready. Notably, this enables businesses to always provide their services despite what is happening. According to the study, 86% of firms have seen that their employees are more engaged in tasks and provide higher-quality work. In addition, the same survey found that employees were excited about the ease with which they could access every vital detail. Furthermore, it depicted the employer as more trusting.

Must Know SaaS Statistics Today

Must Know Stats

9. Salesforce.com is the Largest SaaS Company in the United States.

Based on geographical area, Microsoft is considered the most prominent SaaS firm, as it covers the whole planet and even has more customers than other SaaS companies. Moreover, it’s worth stating that most of Microsoft’s products are free, so it doesn’t record the largest value. Considering the sheer value, Salesforce.com, with a $183.07 billion market capitalization, is recognized as the most significant global SaaS business. The firm provides an extensive CRM software solution and provides excellent customer service. Many companies use the service to assist in locating possible customers and seal the deal. Following Salesforce.com is Adobe, which has a market cap of $152 billion. After Adobe, Intuit comes in third place, with a market cap of $114 billion. 

10. There Are Approximately 7,000 SaaS Companies in the Marketing Sector.

Regardless of the massive growth in many sectors, marketing is one of the most essential areas where SaaS has nearly been fully adopted. This implies that most SaaS firms focus on the marketing industry. Research revealed that in 2020, more than 7,000 SaaS firms were providing marketing services. In contrast, the healthcare sector, which has been increasing rapidly for the past years, has only 770 firms dedicated to providing SaaS systems. 

11. New SaaS Companies Will Spend More Than 90% of Their Revenue on Luring Customers.

Research shows that the SaaS sector is highly competitive, and the ideal way to position yourself as one of the most successful in the industry is to build a customer base rapidly. Notably, the larger the customer base, the higher the revenue generated, and the easier it is to sort out every employee’s costs. The more people use your mobile app, the more likely it is to have lower churn rates. It noted that it’s not unusual for a newly developed SaaS firm to invest more than 90% of its revenue to lure new customers. This statistic further implies that most SaaS companies are more likely to make losses during their first year of launch. Moreover, should this work and the company lure various customers, the company will stand a higher chance of success. 

12. SaaS Businesses with 5% Churn Rates or Below Make Up 33% of the Total Number. 

The churn rate is the number of subscriptions customers cancel within a given period. It’s worth noting that when the churn rates are high, it is usually connected with sluggish growth, implying that the business may likely fail. Reports further reveal that SaaS companies with 5% churn rates or lower are 32%. An additional 32% of those surveyed found 5–10% churn rates, indicating an acceptable churn rate. Notably, this figure is equivalent to losing one out of every 200 clients annually. In addition, the study revealed that 17% of firms surveyed reported churn rates ranging from 10-15%, and the remaining 19% reported churn rates of more than 15%. Companies with a turnover of $10 million and above reported an average churn of 8.5%. In comparison, businesses that make below $10 million will have a churn rate of about 20%. They stand a higher possibility of failing. Also, it is worth stating that almost one-third of businesses have seen notable increases in churn rates in the past four years. 

13. 56% of SaaS Companies Don’t Provide Free Trials.

There are thousands of mobile applications which you can download for free. Immediately after trying them, you can uninstall or keep the app. You can decide which is the best application for you and your company. Moreover, if you’re seeking a premium SaaS application for your business, you want to confirm that it’s the ideal digital solution to invest in. This is where reviews can come in handy, although the best way to find useful applications is to try them. However, recent research revealed that 56% of SaaS companies don’t provide a free trial of their software program. The statistic suggests that they are too big a business to be bothered about churn rates or they are more focused on generating revenue than satisfying their customers. Also, 44% of SaaS companies provide a free trial, 41% offer a 30-day free trial, and 18% offer a 14-day free trial. Trying out one of these SaaS software providers is ideal from a business viewpoint. You may discover the perfect app and acquire a 30-day free trial. 

14. By 2024, Roughly 99% of Businesses Will Use At Least One SaaS Software.

In 2022, studies revealed that 84% of companies had implemented a SaaS application. These researchers also project that this figure will hit 99% by the end of 2024. In other words, almost every business globally will use a SaaS application. Moreover, this doesn’t imply that they will use premium SaaS apps. The study indicates that every company will experience the advantage of SaaS and engage with at least one SaaS app. Notably, it’s possibly just a situation of time before every business utilizes SaaS applications alone. Lastly, this study progresses and projects that by 2025, half of companies using SaaS will consider centralizing their SaaS management. 

15. 73% of Individuals Consider SaaS As Essential For Business Success.

According to a recent study, 1,724 companies found that 35% of respondents considered SaaS to be quite essential for business success. Amazingly, 38% of those asked believed that SaaS was vital for the success of any company. However, the study doesn’t highlight which participants already utilized SaaS solutions, which would affect the answer. Moreover, this statistic reveals how important SaaS is becoming to companies across all industries. The survey also considered other essential things that are vital to business success. Furthermore, big data was also considered of great importance by 72% of respondents. In addition, virtual reality, blockchain, and augmented reality were ranked at the bottom of the list, recording just a little above 20% of individuals who considered it necessary for success. 

16. The Healthcare Sector SaaS Adoption Rate Grows By 20% Annually.

Businesses across the globe spend an average of $3,000 per employee on SaaS, indicating a considerable investment, which is especially obvious in the healthcare sector. The healthcare industry on SaaS and its adoption has been steadily increasing by an estimated 20% each year. This figure grew from 4% in 2011. According to experts, the industry hit $23.4 billion in 2019 and may reach $51.9 billion in 2024. 

Conclusion

SaaS is one of the most essential digital solutions that has emerged to transform the entire space globally. Interestingly, many companies have recognized its importance and begun implementing it in their firms and sectors. According to the statistics, the United States ranks top in SaaS solutions.

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