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  • 62 SaaS Statistics You Must Learn: 2019 Market Share & Data Analysis

62 SaaS Statistics You Must Learn: 2019 Market Share & Data Analysis

Category: B2B News

SaaS has proven to be one of the best things that ever happened to computing, sending many businesses scrambling to get a hold of such systems. This has led to the popular SaaS market continuing its current growth streak. The sector is seen to reach a whopping $623 billion by the year 2023 at a compound annual growth rate of 18%. This is but one of the many SaaS statistics we’ve collated in this article. Clearly, SaaS currently represents the largest segment of the world market for public cloud services.

To shed more light on this niche market, we have compiled the latest data on market growth, adoption rates and use cases. By the time you’re done with this reading, you will have a better understanding of not only how SaaS has been benefiting companies worldwide but what it can do for your business.

saas-statistics-web-main-final

SaaS has been benefiting businesses since its inception, helping companies attract and retain customers while boosting service. They have found tons of applications in different industries, specifically in the areas of marketing, sales and customer service. This development has greatly contributed to the increase in the SaaS market size.

SaaS has also been experiencing growth in the B2B sector, making use of technologies such as machine learning and AI to further improve automation. There are likewise SaaS tools for small businesses that can help them compete with larger companies.

To keep up with the very purpose of SaaS, vendors have been designing their tools to blend well with different software environments through vast arrays of integrations and APIs. Read on to see more relevant SaaS market statistics.

SaaS Market Statistics

The global SaaS market continues to enjoy robust growth, with the sector seen to reach a total value of $623.3 billion by the year 2020, showing by far the most notable Saas growth statistics. Saas market research has also revealed that businesses and organizations’ push for increased agile and automated processes will fuel this growth.

More and more companies are adopting SaaS technology with those in the retail and consumer goods sectors leading the pack. SaaS consumption, although a global activity, is highly concentrated in the Asia Pacific and North American markets. However, the lack of skilled staff and continued cyberattacks are seen to hamper SaaS growth. The following are SaaS industry statistics worth looking into.

General SaaS Market Statistics

  • For 2018, SaaS vendors spent US$63.1 billion on R&D, which equals to 20% of all US-based enterprise R&D. (OpenView Partners)
  • To date, the best SaaS IPO year was 2018, with 17 new public vendors collecting a total of US$5.1 billion, which is twice higher than the next highest year. (Battery)
  • North America is the most mature SaaS market in terms of adoption. (MarketsandMarkets)
  • Since 2010, the average spend on SaaS applications per company had steadily risen year-over-year (Blissfully).
  • By revenue, Microsoft is the largest worldwide provider of SaaS services, with 18% market share. Salesforce is in second place (11.5%), while Adobe is third (6.7%). (Synergy Research Group)
  • North America and Asia Pacific SaaS markets will post the highest growth rate. (MarketsandMarkets)

Saas Growth Rate Statistics

  • For 2019 to 2023, the global SaaS market is predicted to be worth US$60.36 billion, registering a 9% CAGR within the 4 year period. (Technavio)
  • The average number of SaaS apps used by businesses had grown twice, from 8 to 16, between 2015 and 2017. (BetterCloud)
  • Increased automation and agility are seen to fuel the SaaS market’s growth. (MarketsandMarkets)
  • In 2018, the global SaaS workload grew to 206 million and is predicted to reach 380 million by 2021. (Statista/Cisco).
  • 18% – The forecast compound annual growth rate of the SaaS market. (MarketsandMarkets)
  • There were only 500 marketing apps in 2007. By 2017, there are more than 8,500. (PriceIntelligently)
  • The corporate mobile SaaS market is predicted to reach US$7.4 billion by 2021 (Strategy Analytics)
  • Retail and consumer goods are seen to register the highest growth rate. (MarketsandMarkets)
  • SaaS organizations are now operating in over 100 countries. (Crunchbase).
  • Cyber attacks and lack of skilled workers could hamper the sector’s growth. (MarketsandMarkets)

Top Enterprise SaaS Vendors in 2018

By Percent Annual Growth

% annual growth

Microsoft

Oracle

SAP

Adobe

Salesforce

Source: Synergy Research Group

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SaaS Churn Statistics

Knowing churn rates—the discontinuation of service subscriptions within a period of time—is important to any business. All companies with subscription-based services are subject to churn and SaaS businesses are no exception.

There are a variety of reasons for churn—a customer finding a new vendor, running out of budget or becoming unsatisfied with a company’s customer service. Here, we provide you with key statistics on SaaS churn rates and how they affect corporate revenues.

  • 20% is the median annual churn rate for SaaS businesses that make less than $10 million annually. (chaotic-flow.com)
  • The fastest-growing SaaS firms have an average Quick Ratio of 3.9 to 1. This enables them to generate US$3.9 in revenue for each dollar lost to revenue churn. (Insight Squared)
  • 100% – The revenue retention rate of the very best SaaS companies. (forentrepreneurs.com)
  • The yearly churn rates can differ from 6-10% acquiring large organizations, to 58% for those that target SMBs. (Tom Tunguz)
  • SaaS businesses with contracts lasting 2 years and above are more likely to report lower yearly dollar churn. (totango.com)
  • 5% – The percentage of revenue that medium SaaS companies lose to churn annually. (totango.com)
  • Depending on the company’s size, an acceptable churn rate is seen to be between 5% and 7%. (Sixteen Ventures)

 

saas data

SaaS Pricing Strategy Statistics

Corporate pricing strategies vary from business to business but there are some sectors that adhere to a common pricing model, among which are SaaS businesses. Many of these companies offer free trials and freemium software packages to attract clients. However, what’s quite notable about the sector’s pricing strategies is the fact that businesses seem reluctant to increase their pricing.

They also spend less time analyzing these strategies, a must if profitability is to be maintained. There are B2B strategies that can be used to grow SaaS businesses. Here, we provide you with statistics on SaaS companies’ current pricing strategies and how they have impacted the industry’s profitability so far.

  • 38% of businesses charge based on usage. (labs.openviewpartners.com)
  • 11% – The estimated profit increase of SaaS companies if they raised prices by only 1%. (hbr.org)
  • 40% of companies take a value-based approach to setting prices. (labs.openviewpartners.com)
  • More than 50,000 SaaS vendors offer over 30% discount to their customers, which adversely affects their revenues and customer perception of their brand. (PriceIntelligently)
  • The best total number of paid packages is 3, or low, medium, and high. Providing too much or lesser is not effective. (Avangate)
  • 50% of SaaS companies still depend on user-based pricing. (cobloom.com)
  • 31% of SaaS companies say they offer a very little discount. (labs.openviewpartners.com)
  • 30 days is the most common free trial period. (cobloom.com)

saas facts

Reasons for SaaS Adoption Statistics

SaaS adoption rates have been going through the roof as more and more companies recognize the advantages that these platforms bring to the table. They have also changed the way businesses manage their processes. Data storage has also changed as all corporate information took a trip to the cloud, making them both secure but easily accessible to users. To give you a better idea of what’s happening on the ground in terms of SaaS adoption, we have listed some of the latest stats below.

  • 38% of companies adopt cloud-based systems to enhance disaster recovery capabilities. (SpiceWorks)
  • 93% of CIOs are adopting or planning to adopt cloud SaaS. (Deloitte)
  • 37% of businesses cite flexibility of cloud-based systems as a reason for adoption. (SpiceWorks)
  • 54% of CIOs anticipate using cloud software for core SaaS apps within the next 3 years. (Deloitte)
  • 36% of companies see the reduction of burden on IT support as a key driver for the use of cloud-based solutions. (spiceworks.com)
  • 83% of company work will be done from the cloud by 2020. (logicmonitor.com)
  • For 70% of CIOs, agility and scalability remain as the top motivations for using cloud-based SaaS. (Deloitte)
  • In terms of IT budget, companies will allocate 26% for software and 21% for cloud apps for 2019. (SpiceWorks)
  • Top SaaS budget allocations of businesses are for operating systems (12%), security software (10%), virtualization (10%), and productivity (10%). (SpiceWorks)
  • 63% of businesses say the digital transformation is the leading reason for cloud adoption. (logicmonitor.com)

Cloud vs. Hybrid: What Was the Top Priority for Enterprises? (2017 vs. 2018)

Cloud 2017

%

Hybrid 2017

%

Cloud 2018

%

Hybrid 2018

%

Source: 2018 State of the Cloud Report. Rightscale. 2018.

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SaaS Sales and Marketing Statistics

Marketing, contrary to popular belief, is not a one-size-fits-all process. Companies market different products in different ways and the same could be said of SaaS. Marketing something that undergoes constant changes and has really no physical attributes is both a challenging and daunting task. This is why SaaS companies make use of strategies such as handing out freebies. This is their way of proving their products’ worth and overall value to prospective clients. Likewise, there are SaaS lead generation best practices that businesses can adapt to grow their company. So how are SaaS businesses faring in the marketing area? Below are stats that reflect the current status of SaaS marketing.

  • Field sales app is still the most popular for SaaS businesses with over $25,000 median sales. (forentrepreneurs.com)
  • $1.32 is the median cost to acquire $1 of annual recurring revenue for a new customer. This can drop down to as much as $0.71 through upselling with existing customers. (KBCM Technology Group)
  • The median startup spends around 92% of the average contract value’s first year on the sale per se. (Tom Tunguz)
  • 48% of businesses have an average of a one-year contract, 13% were month-to-month, while 11% had at least three years or more. (KBCM Technology Group)
  • Inside sales strategies are popular among businesses with $1,000 to $25,000 median deal sizes. (forentrepreneurs.com)
  • Having a global, popular brand as a customer adds credibility and helps generate major second-order revenue via referrals. (SaaStr)
  • Worldwide, the biggest functional markets for cloud SaaS apps are CRM (31.6%), HCM (14.7%) and ERP (8.4%). (Apps Run The World)
  • 16% of new ACV sales for average SaaS companies come from up-sells and expansions. (forentrepreneurs.com)
  • Less than 20% of new revenue comes from existing customers in the form of expansions and up-sells. (tomtunguz.com)

saas facts

SaaS Usage Statistics

Being an inexpensive and maintenance-free alternative to on-premise systems, SaaS has been steadily growing in popularity among many businesses. Proof of this is the fact that most chief information officers are planning to migrate to cloud-based systems in the coming years. This high adoption rate does not come as a surprise as SaaS is known for unparalleled accessibility and pricing flexibility. Here are some of the latest statistics that prove the tremendous increase in SaaS use.

  • 54% of CIOs expect to use cloud software for mission-critical cases in the next 3 years. (flexerasoftware.com)
  • 44% – The projected increase in businesses’ SaaS spending. (flexerasoftware.com)
  • 84% of businesses say they have a multi-cloud strategy. (flexerasoftware.com)
  • 24% – The anticipated increase in public cloud spending in 2019. (flexerasoftware.com)
  • 66% of IT professionals say security is their greatest concern in adopting an enterprise cloud computing strategy. (logicmonitor.com)

saas market research

SaaS and Business Statistics

It is undeniable that SaaS has changed the global business landscape. For companies, cloud computing proved to be a boon, allowing them to harness the power of automation without breaking the bank. Some have claimed that these platforms made their organizations more successful compared to other types of systems while others have decided to fully embrace the technology. Small players have likewise been adopting useful Saas solutions, which likewise have been providing proactive customer service, one of its more popular applications. Here are some of the latest Saas statistics software that will give you an idea of how SaaS is being used by businesses. 

  • 38% of companies say that they are running almost completely on SaaS. (bettercloud.com)
  • 84% of new SaaS customers from free trials are website unique visitors. (invespcro.com)
  • 73% of businesses plan to make all their systems SaaS by 2020 (bettercloud.com)
  • 86% of businesses that use SaaS significantly experience relatively higher employee engagement. (BetterCloud)
  • 59% of IT professionals consider cost when purchasing SaaS solutions. (bettercloud.com)
  • 70% – The likelihood of active trial users contacted to buy paid service. (invespcro.com)
  • 34 – The average number of SaaS apps that companies use. (bettercloud.com)

Adoption Rate of Applications Fully Run in Public Cloud (2019)

Website

%

Email

%

Communications

%

Mobile services

%

CRM

%

Productivity apps

%

ERP

%

Data analytics

%

Document management

%

Database server

%

Custom-developed software

%

Backup/DR

%

Virtual desktop

%

Identity management

%

Source: spiceworks.com

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How SaaS Users & Companies Can Benefit From Statistics

The statistics listed in this article are not only meant for users. These SaaS market data can also be beneficial to SaaS companies that wish to boost their bottom lines and experience growth. If you are running a SaaS startup, you can adapt the sales and marketing strategies mentioned above. Also, considering factors such as churn rates, product usage and pricing strategies can greatly benefit your company.

For SaaS end users, these SaaS research reports can walk you through the benefits of adopting these platforms and their potential applications. You can also consider the useful features that these apps have to offer and see if they fit your organization. Finally, knowing how these products are priced can fill you in on how much you should invest in them.

By Nestor Gilbert

Senior writer for FinancesOnline. If he is not writing about the booming SaaS and B2B industry, with special focus on developments in CRM and business intelligence software spaces, he is editing manuscripts for aspiring and veteran authors. He has compiled years of experience editing book titles and writing for popular marketing and technical publications.

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