30 SaaS Industry Statistics [2023]: Trends + Analysis

Research Summary. The upward mobility of the SaaS industry has quickly gained enormous traction in the United States and beyond.

When analyzing the revenues, growth, and adoption of SaaS solutions over the past decade, it’s clear to see that the industry will continue to expand in the coming years and perhaps even become the main software solution used by businesses.

• As of 2022, the SaaS industry has a market size of $186.6 billion

• The SaaS industry currently has an annual growth rate of 18%

• 39% of SaaS companies use value-based pricing

• The SaaS industry’s value is projected to grow to $700 billion by 2030

• SaaS revenue is expected to reach $369.4 billion by 2024

• SaaS growth can generate between $5 million to $100 million in annual recurring revenue

• 99% of companies will be using one or more SaaS solutions by the end of 2023

For further analysis, we broke down the data in the following ways:
Adoption | Company | Benefits | Trends and Projections

General SaaS Industry Statistics

• As of 2023, 56.67% of all SaaS companies in the world are located in the United States.

  Out of the 30,000 SaaS companies that exist around the world today, the United States accounts for the majority of them by far, with 17,000 companies in total. In comparison, the runner-ups for the most SaaS organizations in the world are the United Kingdom and Canada with 2,000 companies, and Germany, France, and India with 1,000 companies.

  SaaS Companies By Country

  Country	Number of SaaS Companies
  United States	17,000
  United Kingdom	2,000
  Canada	2,000
  Germany	1,000
  France	1,000
  India	1,000
  China	700
  Brazil	650
  Australia	600
  Spain	500

• The SaaS industry in the United States has a market value of $108.4 billion.

  The SaaS industry in the United States is expected to reach a market value of $225 billion by 2025. By a large margin, the United States has the largest Saas sector in the world.

• SaaS companies from the United States hold approximately 14 billion customers around the world.

  As of 2021, these organizations globally use an average of 110 SaaS applications, a figure that has been steadily growing since 2015.

• The largest SaaS company on the United States stock exchange is Salesforce.com Inc with a market cap of $183.07 billion, as of March 2023 .

  The next biggest SaaS companies out there are Adobe Inc., with a market cap of $152.37 billion, Intuit Inc, with a market cap of $114.13 billion, and Shopify Inc., with a market cap of $55.08 billion. Between January of 2020 and September of 2021, Salesforce grew from a market cap of $161 billion to $251 billion.

• As of 2021, an average of 110 SaaS apps are used per organization.

  The amount of SaaS solutions that companies use has been steadily rising. In 2016, organizations used an average of 12 SaaS apps. In 2015, companies only used an average of 8 SaaS solutions.

General SaaS Adoption Statistics

• 99% of companies will be using one or more SaaS solutions by the end of 2023

• 38% of companies run almost entirely on SaaS

• 86% of organizations stated that they plan to move all their apps to SaaS after 2022

• Almost 78% of small businesses have invested in SaaS options

SaaS Company Statistics

• 98% of SaaS businesses experience positive results from dynamic pricing.

  Dynamic pricing refers to employing a policy of changeable pricing according to market conditions at the given time. This approach aims to maximize revenues by not adhering to a strict pricing schedule, and it is found to be especially beneficial for SaaS brands.

• There are approximately 7,000 SaaS companies serving the marketing industry alone.

  Alternatively, there are about 770 major SaaS companies involved in the healthcare software space as of 2020.

• According to one study, 56% of SaaS companies do not offer a free trial.

  In comparison, 44% offered a free online trial, 41% offered a free 30-day trial, and 18% offered a free two-week trial.

• The average churn rate at SaaS companies is approximately 5%.

  To put that in perspective, a stereotypically ‘good’ churn rate is considered to be 3% or less, though this varies across industries.

• One 2016 study found that Enterprise SaaS companies have an average contract value that is greater than $100,000.

  Alternatively, mid-market companies have an average contract value between $10,000 and $100,000, and SMB companies are less than $10,000 per year for every customer.

• On average, SaaS companies spend 92% of their first year’s revenue on customer acquisition.

  This translates to roughly spending 11 months of businesses’ first year on their customer acquisition costs.

• According to a 2021 study, 48% of SaaS businesses reported having an average contract length of one year.

  In comparison, 13% of SaaS companies stated that their typical contract was on a month-to-month basis, and 11% of respondents said that their average contract length was at least three years.

Benefits of SaaS

• 70% of CIOs are attracted to cloud-based SaaS for its agility and scalability

• 86% of businesses that use SaaS report experiencing significantly higher employee engagement

• The most important factors for SaaS buyers are data security, being able to trust a brand, the value for the price paid, the availability, and how easy it is to use

• Companies that have adopted cloud platforms report that they can bring new capabilities to market approximately 20% to 40% faster

SaaS Industry Trends and Projections

• One 2020 annual report found that SaaS app usage across companies of all sizes increased by about 30% between 2018 and 2019.

  This report took into consideration data from more than 1,000 companies. The same report found that the average number of apps being used had also increased by approximately 30%.

• The Compound Annual Growth Rate (CAGR) of the SaaaS market for business applications is 16.4% between 2017 and 2022.

  In other words, SaaS applications have grown from $44.4 billion in 2017 to $94.9 billion in 2022.

• By the end of 2023, 99% of companies will be using at least one SaaS solution.

  The wide-scale adoption of SaaS has made history with its lightning speed of taking over and its usefulness across various industries. In the health field alone, SaaS adoption grows at a rate of 20% every year.

SaaS FAQ

1. What are examples of SaaS?

   Some examples of SaaS are Dropbox, Google Workspace, Salesforce, Hubspot, Slack, and Shopify. The largest SaaS company on the United States stock exchange is currently Adobe Inc.

   These companies all provide different services to customers. For example, Dropbox specializes in storage and data sharing, while Shopify provides users with a platform to sell products online. Despite many of these companies 10+ years old, they’ve only recently began to amass massive popularity.

2. What percentage of software is SaaS?

   Approximately 70% of total company software use is SaaS as of 2022. However, this number has the potential to reach up to 85% by 2025, indicating that SaaS as software will only continue to become more popular.

3. What percentage of companies use SaaS?

   80% of companies already use at least one SaaS solution. By the end of 2021, 73% of all organizations began using SaaS solutions exclusively or at least mostly.

4. How much do companies spend on SaaS per employee?

   Companies spend $2,623 on SaaS per employee per year on average. Employees also use approximately 8.3 SaaS apps each, meaning that costs can quickly add up.

5. How large is the SaaS market?

   The SaaS market is valued at $186.6 billion in 2022 – making it enormous, fiscally speaking. It also is growing at an exponential rate. The SaaS industry currently has an annual growth rate of 18%. Therefore, it’s likely that the SaaS market will only grow larger.

6. Why are companies using more SaaS?

   Companies are using more SaaS because it’s been shown to increase productivity. In turn, this increase in productivity has also been proven to lower costs, making SaaS especially appealing.

Conclusion

It’s interesting to live through the moments that make history in an industry’s massive expansion. That is what is currently happening for the multi-billion dollar SaaS industry.

As of 2022, the SaaS market is valued at approximately $186.6 billion, with an annual growth rate of 18%. Revenue from the SaaS market is predicted to reach $369.4 billion in a little under three years, suggesting that the industry will more than double its value.

In addition to the monetary value of the SaaS industry, it’s been received with a warm welcome from a diversity of industries. By the end of 2023, 99% of companies will be using at least one SaaS solution.

Additionally, an estimated 38% of companies run exclusively on SaaS, and 78% of small businesses have invested in SaaS options. By 2022, 86% of organizations stated that they plan to move all their apps to SaaS, illustrating a bright future for the SaaS industry as a whole.

The United States has the largest SaaS sector in the world, with a market value of $108.4 billion. A figure that’s expected to reach $225 billion by 2025. Out of the 30,000 SaaS companies functioning around the globe today, 17,000 of them, or 56.67%, are located in the United States.

Comparatively, the United Kingdom has the second-largest SaaS sector in the world with 2,000 SaaS companies. The SaaS companies from the United States hold approximately 14 billion customers globally that use an average of 110 SaaS applications each.

As of 2020, an estimated 70% of total company software usage is SaaS. The trend of SaaS takeover is expected to continue and grow exponentially over the next several years.

References

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Author

Sky Ariella

Sky Ariella is a professional freelance writer, originally from New York. She has been featured on websites and online magazines covering topics in career, travel, and lifestyle. She received her BA in psychology from Hunter College.