5 Key Facts about SaaS Market Size

SaaS market size has grown significantly over the years. Software as a Service (SaaS) refers to business applications that are delivered in form of services. According to Gartner, it is expected to rise to $22.1 billion by 2015. In 2013, the global cloud market was estimated to be worth nearly $131 billion. This is a significant market especially when you consider the fact that Cloud Computing is just emerging. There are various factors that have contributed to growing SaaS market size.

SaaS is Familiar

Global Software as a Service market growth is expected to continue until 2015. This is due to the increase in software spending. According to Gartner, this spending is expected to rise to $22.1. The increase in spending is attributed to user familiarity in terms of SaaS function. Users find it easy to apply the Software as a Service. The products are largely sold through subscriptions. This has made it possible for companies to evade large upfront capital expenses and licensing charges. SaaS has identified a strategy that works for its users.

SaaS Targets Diverse Audience

SaaS market size has grown because the software is targeted at a diverse audience. North America is one of the most important markets for the cloud computing service but it has also spread to other parts of the world including Western Europe, Asia Pacific region, and Latin America. The cloud computing service has identified markets that have the infrastructure required to use the service. Countries like Japan showed an interest in the software after research revealed that it could be helpful in the prevention of natural disaster. The service is also available to African, Middle East, and Eastern Europe countries but they are smaller markets because they are still facing some infrastructure challenges. Diversifying its target market has made it possible for the cloud computing service to increase its users.

Contribution by SaaS Vendors

The SaaS market size growth can also be attributed to the contribution made by its vendors. Pure SaaS vendors including saleforce.com have made it easy for users to access the software from any part of the world. Leading on-premises vendors such as SAP and Oracle have put a lot of emphasis on SaaS and this has had a significant impact on its growth.

Low Implementation Costs

The increased interest in SAAS solution in the Asia Pacific region especially in countries like Japan can be attributed to its low implementation costs. Countries that have limited information technology are taking advantage of SAAP cloud computing solutions. In 2012, SaaS revenue in the country rose to $495.2 million compared to $427 million the previous year. Gartner forecasts that SaaS market size growth in Japan will be due to email and CRM. These solutions already have a lot of demand in the country and users will embrace SaaS because it simplifies application management and enhances deployment agility and ease.

Adoption in Emerging Markets

Latin America is one of the main SaaS markets in the developing world. SaaS market size is increasing in the region because the software solutions are considered effective for expense management. Mexico and Brazil are expected to fuel SaaS market size growth in the Latin America region.

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Omri Erel
Omri is the Head of Demand Generation, as well as the Lead Author & Editor of the SaaSAddict Blog. Omri established the SaaSAddict blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to SaaS and cloud migration.
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