Software as a Service Market Report and Forecast 2024-2032

Market Outlook

According to this report, the software as service market size reached a value of USD 294.20 billion in 2023. Aided by the increasing demand for cloud-based solutions and the growing applications of SaaS in various sectors, the market is projected to further grow at a CAGR of 17.9% between 2024 and 2032 to reach a value ofUSD 1.29 trillion by 2032.

Software as a Service (SaaS) is a software distribution model in which applications are hosted by a service provider and made available to customers over the internet. It provides a wide array of software applications including office software, messaging software, payroll processing software, DBMS software, management software, CAD software, gamification, virtualisation, accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CMS), service desk management, and other software solutions. Its applications are designed to support business and technical processes in various sectors including BFSI, retail, education, healthcare, manufacturing, and IT & telecommunication.

The increasing adoption of cloud-based solutions by enterprises is driving the software as service market growth. As businesses strive to achieve operational efficiency, scalability, and cost-effectiveness, they are increasingly turning towards software as service solutions. It eliminates the need for organizations to install and run applications on their own computers or data centres, thus reducing the expenses associated with hardware acquisition, provisioning, and maintenance, as well as software licensing, installation, and support.

Additionally, the growing trend of remote work and the need for collaborative tools have further contributed to the rising the demand for SaaS. With the COVID-19 pandemic accelerating the shift towards remote and hybrid work models, there has been an unprecedented demand for software as service applications that facilitate communication, collaboration, and project management among distributed teams. SaaS solutions such as Zoom, Microsoft Teams, Slack, and Asana have seen a significant increase in adoption as businesses adapt to new working environments.

Its expanding application in various sectors also play a significant role in propelling the market. In the healthcare sector, its applications are used for electronic health records (EHR), telemedicine, and patient management systems, enhancing the efficiency and effectiveness of healthcare delivery. The retail sector leverages it for inventory management, customer relationship management, and e-commerce platforms, enabling retailers to streamline operations and improve customer experience. Moreover, the education sector utilises it for e-learning platforms, virtual classrooms, and administrative management systems, facilitating remote learning and enhancing educational outcomes, consequently driving up the software as service market share.

Further, the growing integration of artificial intelligence (AI) and machine learning (ML) with its applications is expected to drive the market expansion. AI and ML enable its applications to offer advanced features such as predictive analytics, natural language processing, and automation, enhancing the capabilities and value proposition of software as service solutions. Businesses are increasingly adopting AI-driven software as service applications to gain insights, automate processes, and improve decision-making, thereby driving the market growth.

Moreover, the rising focus on cybersecurity and data privacy is influencing the market dynamics. As cyber threats become more sophisticated and data breaches more frequent, businesses are prioritising security in their software as service solutions. Its providers are investing in advanced security measures and compliance with regulations such as GDPR and CCPA to ensure the protection of sensitive data, boosting the confidence of businesses in adopting SaaS solutions.

As per the software as service market analysis, the competitive landscape of the market is characterised by the presence of several key players including Microsoft Corporation, Salesforce.com, Inc., Oracle Corporation, SAP SE, Adobe Inc., and IBM Corporation. These companies are focusing on strategic initiatives such as mergers and acquisitions, partnerships, and product innovations to strengthen their market position and expand their customer base. For instance, Salesforce’s acquisition of Slack and Microsoft’s acquisition of LinkedIn are examples of how leading players are enhancing their SaaS offerings and capabilities.

Market Segmentation

The market can be divided based on deployment, solution, organisation size, end use, and region.

Market Breakup by Deployment

• Public Cloud
• Private Cloud
• Hybrid

Market Breakup by Solution

• Customer Relationship Management (CRM)
• Operations and Manufacturing
• Enterprise Resource Planning (ERP)
• Content Management Systems
• Human Capital Management (HCM)
• Supply Chain Management
• Others

Market Breakup by Organisation Size

• Small and Medium Sized Enterprises
• Large Enterprises

Market Breakup by End Use

• IT and Telecom
• Manufacturing
• BFSI
• Healthcare
• Retail
• Education
• Government
• Others

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• Europe

Competitive landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in global software as service market. some of the major players explored in the report are as follows:

• Microsoft Corporation
• Oracle Corporation
• Salesforce, Inc.
• Google LLC
• SAP SE
• Adobe Inc.
• Cisco Systems, Inc.
• IBM Corporation
• Accenture plc
• Infosys Limited
• Others