Software as a Service (SaaS) Market Report 2025

The software as a service (SaaS) market size has grown steadily in recent years. It will grow from $243.02 billion in 2024 to $253.58 billion in 2025 at a compound annual growth rate (CAGR) of 4.3%. The growth in the historic period can be attributed to increased internet penetration, technology development, emphasis on reducing IT infrastructure costs, government initiatives and rising penetration of e-commerce.

The software as a service (SaaS) market size is expected to see strong growth in the next few years. It will grow to $308.37 billion in 2029 at a compound annual growth rate (CAGR) of 5%. The growth in the forecast period can be attributed to adoption of iot technology, outbreak of COVID-19 disease (COVID-19) and increasing smart cities. Major trends in the forecast period include implementing artificial intelligence (AI) to provide improved personalization, speed and security, adopting white label SaaS and providing customized solutions to gain clients, implementing centralized analytics to enhance and speed up the process, and adopting mobile optimization.

Anticipated changes in the business landscape are poised to favor the Software as a Service (SaaS) market in the forecast period, with cloud-based solutions playing a crucial role in supporting business operations amid evolving conditions. These dynamic market conditions encompass economic uncertainty, intensified competition, the growing prevalence of mobile adoption, shifting regulations, increased internet usage, and diversified applications. Organizations, grappling with these challenges and navigating through expanded infrastructures and established networks, are turning to scalable and flexible solutions such as SaaS and other cloud-enabled services. This strategic shift aims to manage operations in a cost-effective and efficient manner. The changing landscape has prompted companies to outsource applications and favor cloud computing services, such as SaaS, to alleviate the financial burden associated with infrastructure. Opting for third-party vendors provides companies with the potential for enhanced performance, compliance, and customer satisfaction at a reduced cost. A case in point is Sony Communications, which leverages automation and Infosys SaaS solutions to deliver innovative products and improved customer experiences. Infosys' contributions have enabled Sony to achieve customer loyalty, gain a competitive edge, and thrive in the Software as a Service (SaaS) market.

The increasing demand for cloud-based solutions is expected to drive the growth of the software as a service (SaaS) market in the coming years. Cloud-based solutions include applications, storage, on-demand services, and other resources accessed over the internet through a provider’s shared cloud infrastructure. SaaS solutions are delivered online and are typically subscription-based, enabling businesses to pay a monthly or annual fee, which can be more cost-effective than buying and maintaining on-premises software, especially for small businesses. For example, in December 2023, Eurostat, a Luxembourg-based intergovernmental organization, reported that around 45.2% of EU enterprises utilized cloud computing services, mainly for email hosting, file storage, and various operational tasks, marking a 4.2 percentage point increase from 2021. Therefore, the growing demand for cloud-based solutions is projected to significantly boost the SaaS market.

The integration of artificial intelligence is rapidly gaining traction in the SaaS market. Artificial Intelligence (AI) within the realm of computer science focuses on simulating human intelligence processes through machines. Within SaaS, AI plays a pivotal role in enabling companies to stay current with the latest data, enhance user experiences through predictive analytics, automate processes that were previously manual, and personalize user interface features. A case in point is Oracle, a prominent player in the SaaS market, utilizing AI and machine learning to surpass Salesforce in the SaaS domain. This underscores the significance of AI and machine learning as differentiating factors contributing to the growth of the SaaS market.

Key players in the software as a service (SaaS) market are intensifying their efforts to introduce innovative solutions tailored for 5G, aiming to expand their SaaS offerings and gain a competitive advantage. SaaS solutions for 5G are designed to support the infrastructure of 5G networks. Nokia Corporation, a Finland-based telecommunications company, exemplifies this trend by launching the Nokia Core Software-as-a-Service (SaaS) for 5G in November 2022. This pioneering solution is the first in the market to offer a complete core solution delivered through a SaaS delivery model. Businesses are provided with the flexibility to manage their network core using a highly adaptable, fully automated, and scalable software approach, enhancing business agility and expediting the time to value for offering and monetizing network services.

In September 2024, HCLSoftware, the software division of HCLTech based in India, acquired Zeenea for an undisclosed amount. This acquisition is intended to strengthen Actian, another division within HCLSoftware, by providing a unified solution for data intelligence and governance. This solution aims to help customers efficiently manage, discover, and enhance the value of their data assets. Zeenea, a France-based company, is recognized for its cloud-native Data Discovery Platform, which offers features such as metadata management, data cataloging, governance, and compliance.

Major companies operating in the software as a service (SaaS) market include Microsoft Corporation, Salesforce.com Inc., Oracle Corporation, Automatic Data Processing Inc., Alphabet Inc., Adobe Inc., Amazon.com Inc., Cisco Systems Inc., ServiceNow Inc., Shopify Inc., Alibaba, Tencent, Kingsoft Corporation, UCloud Information Technology, Fujitsu Ltd., Toshiba Corporation, Hitachi Ltd., KDDI Corporation, Nippon Telegraph and Telephone Corporation, Infosys Technologies Ltd., Tata Consultancy Services, Zenith Infotech Limited, DigitalOcean Inc., Wipro Ltd., NetApp India Pvt. Ltd., SAVVIS Australia Pty Ltd, Computacenter, Sage, Commerce Decisions, Mimecast, Wise, GoCardless, Sequel, Triptease, Duffel, MeTail, SKB Kontur, Softline, Tensor, Mango Telecom, Rostelecom, Neuron Soundware, Manta, IP Fabric, 1C BItrix, TOTVS S.A, Beedoo Edtech, Tiendanube, Vates, Glamit, GOintegro, CodeLab, Kitopi, LMKR, Dimension Data, T-Systems South Africa (TSSA), Kobo360, Teraco Data Environments, Main Data Nigeria Limited, Accenture PLC.

North America was the largest region in the Software as a Service (SaaS) market in 2024. Western Europe was the second largest region in the global Software as a Service (SaaS) market share. The regions covered in the software as a service (SaaS) market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the software as a service (SaaS) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.

Software as a Service (SaaS) is a model for distributing software that enables data accessibility from any device with an internet connection and a web browser. In this web-based approach, the software provider takes responsibility for hosting and maintaining the servers, databases, and code that constitute the application.

The primary deployment types of Software as a Service (SaaS) include public cloud and private cloud. The public cloud is an IT model wherein on-demand computing services and infrastructure are overseen by a third party and shared by multiple organizations through the public Internet. This software is utilized by small and medium enterprises (SMEs) as well as large enterprises for various purposes such as customer relationship management (CRM), enterprise resource planning (ERP), human resource management (HRM), manufacturing and operations, and supply chain management (SCM). End-users of the software span across different sectors, including manufacturing, retail, education, healthcare, IT and telecom, BFSI, and others.

The software as a service (SaaS) market research report is one of a series of new reports that provides software as a service (SaaS) market statistics, including software as a service (SaaS) industry global market size, regional shares, competitors with a software as a service (SaaS) market share, detailed software as a service (SaaS) market segments, market trends and opportunities, and any further data you may need to thrive in the software as a service (SaaS) industry. This software as a service (SaaS) market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The software as a service (SaaS) market includes revenues earned by entities by providing cloud based software services. SaaS is a software solution that can be purchased on a subscription or pay per use basis to use an application for organizational purposes. Customers can access this application over the internet, mainly through a web browser. All software and application data is located in the service provider's data center. SaaS allows an organization to run an application with minimal upfront costs and accelerates the overall functionality of the organization. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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