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7 SAAS Industry Trends to Watch Out For in 2024

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Competition in the software-as-a-service (SAAS) industry can be fierce. Notably, 2024 presents opportunities for innovation, evolution, and transformative advancements. As businesses increasingly turn to cloud-based solutions, staying current with industry trends becomes a strategic move.

This infographic tackles 2024 SAAS industry trends and statistics, giving you insights on how to redefine your processes and propel your business into a new era of digital excellence.

SAAS Market Statistics

The SAAS landscape is ever-evolving—and staying on top of the trends in the SAAS industry right now can help you navigate it effectively. Here are notable SAAS stats to keep you attuned to the current and future state of the market.

1. Per SAAS-focused statistics, the market was worth $197 billion in 2023 and may grow to $232 billion by 2024.

The financial ascent of the SAAS market speaks of the industry’s indispensable role in the modern business landscape. 

For one, businesses recognize the effectiveness of cloud-based solutions in enhancing operational efficiency and agility. Since SAAS applications are in the cloud, users can access them anytime and anywhere as long as they maintain an internet connection.

This SAAS-enabled functionality can also be a huge advantage with the rise of remote and hybrid work setups.

2. The global SAAS market expects an increased compound annual growth rate (CAGR) of 13.7% from 2023 to 2030.

The demand for innovative software solutions persists as businesses across sectors seek to leverage technology for competitive advantage. This sustained growth rate heightens the relevance of SAAS solutions in driving digital evolution throughout industries.

Typically, on-premise solutions entail significant resources on IT infrastructure and support. However, with subscription-based models and constant updates, SAAS software solutions can minimize these costs.

Plus, they appeal to organizations striving for flexibility, scalability, and cutting-edge tech without the burden of enormous upfront costs.

3. By 2025, SAAS-based software will take over approximately 85% of business apps.

As the current business landscape experiences a paradigm shift, it signals a departure from traditional software deployment models toward the cloud-centric approach of SAAS.

According to recent SAAS statistics, organizations use 110 SAAS applications for various tasks, from communication to project management. 

The projected dominance of SAAS in business applications aligns with the evolving preferences of enterprises. Cloud-based solutions offer many advantages, including robust security through data encryption, collaboration features, and automatic updates.

They also address the need of contemporary businesses for streamlined workflows and enhanced collaboration among remote teams.

4. At the end of 2024, there will be about 72,000 SAAS companies.

SAAS industry trends and statistics demonstrate significant demand for their services. For instance,  roughly 9,100 SAAS companies in the US have 15 billion customers globally.

The UK came second with 1,500 SAAS companies, accumulating 293 million customers worldwide. With the rising demand for SAAS solutions, many companies may enter the market and grab a piece of the pie.

5. With over 17,000 SAAS companies, the US takes the largest market share worldwide.

The massive and swift adoption of SAAS solutions by large enterprises and small businesses alike contributes to the country’s stronghold in the global market.

Specifically, Apple, Microsoft, and Alphabet (Google) are the top 3 players in the global SAAS industry, so it’s no surprise that the US takes the largest share of the market. In 2022, Apple was the largest SAAS provider globally, valued at $2.9 trillion.

Meanwhile, Microsoft and Alphabet were valued at $ 2.3 trillion and $ 1.9 trillion, respectively.  

Top 2024 SAAS Industry Trends

Staying ahead means anticipating and adapting to emerging trends in the dynamic SAAS market. As you navigate 2024, key trends reshaping the SAAS industry should influence how you operate, innovate, and deliver value. Below are the most prominent trends in the SAAS industry right now.

1. Expedited artificial intelligence (AI) adoption

From predictive analytics to personalized user experiences, the potential behind AI-driven functionalities captures the attention of many organizations.

Modern businesses integrate AI into their SAAS solutions to enhance automation, decision-making, and efficiency. By combining AI and SAAS capabilities, you, too, can stay competitive in a rapidly evolving market.

2. Increased focus on cybersecurity and compliance

As the world becomes increasingly connected, ensuring robust cybersecurity and compliance becomes necessary. Not only does heightened cybersecurity enhance customer data protection, but it also helps prevent your business from incurring costly fines and penalties. 

Statistics show that there were about 700,000 cybersecurity threats detected from April to June 2023. For this reason, regulatory requirements have heightened, requiring businesses to prioritize security measures and compliance frameworks in using SAAS models.

Ultimately, this approach instills public confidence and trust as a foundation for long-term business success.

3. Priority for customer success and experience

Amid the expanding SAAS market, customer expectations evolve. Beyond basic functionality, users now seek seamless experiences, prompt support, and tangible value from SAAS. 

To achieve these goals, your company could invest in delivering exceptional user experiences via personalized support and proactive customer success initiatives.

You must recognize that customer satisfaction is crucial to your organization and commit to fostering long-term SAAS relationships for the company’s growth.

4. More vertical SAAS solutions

Based on 2024 reports, the SAAS market will comprise vertical SAAS solutions. Since industries have diverse needs and a generic approach may not fully address specific requirements, what vertical SAAS applications do is cater to niche markets.

Instead of offering one-size-fits-all solutions, new SAAS iterations address all industries’ unique challenges and requirements—from healthcare to finance. Immediate adoption of vertical SAAS solutions can get you ahead of the curve and provide an advantage over competitors.

5. Increased usage for low-code and no-code platforms

The shortage of skilled developers and the increasing demand for custom applications propel the rise of low-code and no-code platforms. These platforms allow the creation of applications and solutions with minimal coding effort.

These solutions also enable non-technical users’ contributions to app development, significantly decreasing the time to market.

Lastly, accelerated innovation for SAAS solutions fosters collaboration between your IT and business teams.

6. Data and business intelligence-driven strategy changes

The abundance of data that SAAS applications generate offers a goldmine of information. With it, your business can gain deeper insights into user behavior—allowing you to align your strategies with evolving market dynamics.

Moreover, leveraging data-driven insights can help optimize processes and refine user experience, ultimately driving customer satisfaction.

7. Rise of micro-SAAS

Expect micro-SAAS ventures to gain more prominence in 2024. These niche-focused SAAS solutions offer custom functions in response to the need for consumers’ and businesses’ hyper-specialized solutions.

Plus, micro-SAAS applications are often easier to create and have lower barriers to entry. This advantage means it’s easier for your company to stand out even in competitive markets.

Stay Ahead of the SAAS Curve

The SAAS landscape is more dynamic than ever before. With increased market demand and players, your company must stay on top of industry trends to meet your goals and customers’ expectations.

Adaptability and innovation in the evolving SAAS industry can propel your business forward and secure user confidence.

Likewise, you need a trusted SAAS lawyer to assist you in crafting your company’s Terms of Service. Make TOS Lawyer your choice. Our team of professionals can help you craft a comprehensive contract to safeguard your business from costly litigation. 

Book a free consultation, or contact us to discuss how we can help you.

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