According to the “Global Software as a Service Market Analysis (2018-2024)” report, prepared by Research and Markets, the global Software as a Service (SaaS) market is expected to reach 185.8 billion dollars in 2024, with an annual compound growth rate of 21.4%.
Software as a service is a model in which the software and other associated data are hosted centrally and accessed with the help of a web browser. SaaS allows users to access various components and features of the software with the help of a subscription model (pay-per-use) and without the need to worry about product licensing.
The integral change in the way of perceiving communication (business outsourcing and globalization) is the key factor responsible for the development of SaaS solutions. The main use of instant messaging and social media has led to the adoption of SaaS in all companies. The appearance and penetration of messaging applications, emails and video calls for private and commercial needs have made end users depend on smartphones and tablets. Therefore, an increasing number of end users are looking for remote access to affordable costs, as a result, influencing the demand for SaaS solutions.
The problems related to data security, the lack of integration and the need for constant and high-speed Internet connectivity represent an obstacle to the growth of the SaaS industry. Complications related to direct access to data create a high level of complexity when combining legacy systems in installations, cloud applications and multiple SaaS applications.
According to the implementation model, the SaaS market can be segmented into public cloud, private cloud and hybrid cloud. The private cloud and public cloud models are showing a positive trend in the market, and companies are trying to use the hybrid cloud model in the recent future.
Depending on the application, the SaaS market can be divided into business resource planning (ERP), customer relationship management (CRM), human resource management (HRM), supply chain management (SCM) and others. Other types of applications include web conferencing platforms, messaging applications and collaborations. CRM has the largest market share for SaaS.
By vertical, the SaaS market can be segmented into banking, financial services and insurance (BFSI), information technology (IT) and telecommunications, manufacturing, retail, health and education, among others. The BFSI segment continues to maintain the largest market share in the vertical segment, and the manufacturing segment will grow at a significant rate until 2024.
By region, North America has the largest market share in the global SaaS market. The main reason is the extensive use of SaaS-based solutions, such as human capital management, office suites, emails and web conferences. It is anticipated that Asia-Pacific will be the fastest growing region for the SaaS market, due to the growing number of SaaS providers that provide continuous marketing, support and sales services to their customers.