• Statistics

SaaS Statistics and Facts that May Determine its Future

  • Felix Rose-Collins
  • 4 min read
SaaS Statistics and Facts that May Determine its Future

Intro

With COVID sending the majority of the working population to remote work, Software as a Service, or SaaS, has become a popular tool for businesses.

This allows businesses to utilize the software without the need to download it and have it take up space.

General SaaS Statistics and Facts

  • The SaaS market was projected to reach $623 billion in 2021 with an annual growth rate of 18%.
  • The use of SaaS in the healthcare industry has been growing by 20% per year.
  • The benefits of SaaS according to 70% of CIOs are scalability and agility.
  • Even small businesses have gotten into SaaS with nearly 78% of them invested in SaaS options.
  • Microsoft is one of the top vendors of SaaS with an annual growth of 45%. Oracle is in close second at 43% growth, SAP at 36%, Adobe at 32%, and Salesforce at 25%.
  • Websites are the most used application used in the public cloud followed by email.
  • In 2018 about 20% of US-based R&D was spent by SaaS vendors equaling about $63.1 billion.
  • In 2020 the SaaS exceeded its expected growth of $500 billion and reached $1 trillion!
  • By 2025 the SaaS market is predicted to reach a value of $832.1 billion.
  • About 37% of all companies have adopted SaaS in order to achieve more flexibility.
  • SaaS is beginning to take over with 38% of companies saying that they are running completely on SaaS.
  • The global data visualization tools market is expected to reach US$ 11.6 Bn by 2028 at a CAGR of 11.1%.
  • By 2025 80% of companies are projected to have switched over to SaaS completely.
  • Adobe and Salesforce are the largest SaaS companies on the US stock exchange with a market cap of $294.7 billion and $251.8 billion respectively.
  • For the 5 largest SaaS companies between 2008 to 2020 there was 44 fold value increase.

SaaS Churn Statistics

  • A lower churn rate is likely to be reported by SaaS Businesses with a 2-year contract or longer.
  • A churn rate of between 5% and 7% is an acceptable rate.
  • 5% of revenue is lost due to churn for medium-sized SaaS companies.
  • For the best SaaS companies, a 100% retention rate is common.
  • Companies that focus on SMBs (Server Message Block) see the highest yearly churn rate of about 58%.
  • Companies that serve large businesses see an annual churn rate of 5-7% annually.
  • In a PwC's study, 54% of US consumers said the experience at most SaaS companies needs improvement.

SaaS and Business Statistics

SaaS and Business Statistics

  • By June 2020 there were 15,529 SaaS companies in the world.
  • There are over 8,500 software companies today, mainly due to the fact that starting and building a company is 10 times faster these days.
  • The yoga fitness business is one of the growing businesses, and 87% of people are running fitness clubs worldwide, that's why the gym software is growing fast in 2022.
  • Of the SaaS companies worldwide, about 44% offer a free trial, 41% a 30-day trial, and 18% a 14-day trial.

SaaS Sales and Marketing Statistics

  • 13% of companies have month-to-month contracts with SaaS companies.
  • 48% of companies have yearly contracts with SaaS companies.
  • Many SaaS companies see 2-3 times higher sales conversion rate for their affiliate marketing programs vs. other marketing channels.
  • A SaaS affiliate marketing program arms businesses with an additional source of revenue in a low-risk and low-cost way that is easy to track thanks to affiliate software designed specifically for these purposes.
  • 11% of companies have contracts of 3 years or more with SaaS companies.
  • The Asia Pacific region is expected to have the highest rate of growth from 2022 to 2025.
  • Blogs are popular with SaaS companies with 85% of the largest running and operating them and 36% of them sharing educational content.
  • Podcasts are also being used by SaaS companies - about 18% of the top companies host a podcast.

SaaS Adoption Statistics

  • Businesses generally use multiple applications when they adopt SaaS.
  • On average, companies use 34 Software as a Service applications.
  • In 2017 about 86% of data workloads were taken up by Cloud, and that number is said to have reached 94% in 2021.
  • One of the reasons cyber attacks may be a big deal in the future is that of all the Government organizations in the US 50% use cloud applications.
  • Disaster recovery is a big justification for companies switching over to SaaS with about 38% of them adopting it for that reason.

SaaS Usage Statistics

  • About a decade ago it was common for software to take about 57 hours to implement, but now it is down to 7 hours.
  • The biggest users of cloud SaaS are software engineers, at 20% and then followed by architects and technical leads at 11%.
  • Companies that use SaaS claim that 70% of their apps are cloud-based. This is projected to grow to 85% by 2025.

Benefits of SaaS Statistics

  • One of the largest benefits and draws to SaaS is the data security as well as the ease of use.
  • Businesses that implement SaaS see significantly higher employee engagement. In fact, about 86% of companies that utilize it report this.
  • Another benefit of SaaS is speed, and companies that have adopted SaaS say that they can deliver 20% to 40% faster.

SaaS Trends and Growth Statistics

  • About 100 countries in the world have SaaS organizations operating in them.
  • Over a quarter (26%) of the European Union is operating off of the cloud.
  • In the UK, 98% of businesses are operating on the cloud leaving a mere 2% still in the digital stone age.
  • SaaS sees an annual growth rate of 18%.
  • The biggest risk of SaaS growth comes from cyber attacks, which are especially affecting the SaaS community with the looming threat of Russia.
  • The highest rate of SaaS companies is held by the U.S. with 15,000 companies. The UK trails behind with 10,000 companies, and Canada and Germany both have 1,000.

Conclusion

SaaS has been growing over the years at an astronomical rate, exceeding expectations.

However, with the looming threat of cyber attacks and a lack of skilled workers, this business is at great risk and on shaky ground.

Will SaaS continue to be successful? We can only get a glimpse of what the future holds through Saas Statistics.

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