SaaS Market Overview: 13 Size + Growth Statistics for 2024

We gathered the latest SaaS market trends and insights to help you navigate the rapidly changing market. Learn the most recent growth statistics to help fuel your innovation and gain a competitive edge in the $200 billion industry.

Here, you’ll find:

• SaaS market highlights
• SaaS market size and growth statistics
• SaaS and AI predictions

The $200 billion software-as-a-service (SaaS) market is a rapidly evolving area of the tech industry. As a result, the competitive landscape can be difficult to get a handle on.

Read on to get the latest stats on the SaaS market so you know what to expect — and how to thrive.

SaaS market highlights

When new SaaS platforms seemingly emerge daily, staying informed of the latest trends and changes is essential to navigate and adapt.

• The U.S. has about 9,100 SaaS companies and service about 15 billion customers worldwide. (Source: Statista)
• 99% of companies will be using at least one SaaS solution by the end of 2024. (Source: SaaS Academy)
• SaaS companies that improve customer service and experience can improve customer lifetime value by 25%, which is vital since the SaaS model relies on subscriptions for revenue. (Source: McKinsey)
• 78% of Companies Use More Than 4 SaaS Platforms. (Source: HireDNA)
• Adobe Inc. is the top publicly traded U.S. SaaS company in 2024. (Source: HireDNA)
• The global SaaS market has a compound annual growth rate (CAGR) of 27.5%. (Source: Fortune Business Insights)
• In 2024 and beyond, artificial intelligence and machine learning are likely to play a large role in applications SaaS companies create (Source: Cyclr)
• SaaS adoption is highest in marketing and advertising, technology, education, retail, financial services, ecommerce, and manufacturing. (Source: SaaS Academy)
• SaaS businesses’ average customer churn rate is 5%. (Source: SaaS Academy)
• The healthcare SaaS market is expected to hit a $50 billion value by 2028. (Source: Grand View Research)
• The banking SaaS market is expected to hit $40 billion by 2029. (Source: Fortune Business Insights)
• Based on enterprise size, the global software as a service (SaaS) market is segmented into small & medium enterprises (SMEs) and large enterprises. (Source: Precedence Research)
• Global SAAS Market size to USD 1298.92 billion by 2030, growing at a CAGR of 19.7% in the forecast period (2023-2030). (Source: Skyquest)

SaaS market size and growth statistics

1. Worldwide spending on public cloud services is forecast to reach $1.35 trillion in 2027

Fueled by the pandemic, the SaaS market has grown explosively and this isn’t expected to slow any time soon.

According to the International Data Corporation, 40% of this comes from SaaS, while other large contenders in the public cloud services realm include infrastructure as a service (IaaS) and platform as a service (PaaS)

The enormous end-user spending also speaks to the vast possibilities for SaaS providers. Any industry can join the money-making wagon as long as it has the technical know-how and lives and breathes artificial intelligence.

Legal and accounting organizations like CLEO and FreshBooks are embracing SaaS software for bookkeeping and legal practice management.

2. The U.S. has 9,100 SaaS companies

To put things in perspective, the UK comes in second with only 1,500 SaaS companies. The software-as-a-service market is hot in the U.S. but also fiercely competitive. If you want to stand out, you’ll need to bring your A-game.

Maybe you offer a vacation rental management SaaS solution — we can think of a few competitors right off the bat. Your customers have hundreds of options, so you must stand out and convince them you’re the best.

Step one? Serious brand awareness and bold UVPs.

“When it comes to standing out, positioning, differentiation, etc., it’s important to consider your core value propositions,” says Steven Dang, Growth and Strategy VP at HawkSEM. “Know what they are and distill them into an essence so you can help your customer know how you’re different and what you have to offer. Competitive matrixes, video explainers, infographics, and customer testimonials are easy ways of communicating your core value propositions.”

This is where SEO (search engine optimization) and PPC (pay-per-click) management become vital for today’s SaaS companies. Any slack in ad management will dim your light in Google’s eyes, and competitors will be all too eager to overshadow you.

Our SEO experts approach PPC management with a fine-toothed comb, helping you strategize, manage, and execute a data-driven methodology that brings you more traffic. For example, the cloud monitoring SaaS niche is filled with big names like Azure Monitor and Amazon CloudWatch.

We helped our client Datadog take up more space, and double their lead volume, by fixing up their landing page, tracking URLs, and revamping their keywords. Specifically, we noticed long-tail keywords were more relevant for Datadog’s integration partners.

3. 99% of companies are forecasted to be using at least one SaaS solution by the end of 2024

With the rise of both remote work and competition, companies rely increasingly on SaaS solutions for efficient business operations. Today’s remote office has a full tech stack.

Here are some key players you’ll find in today’s office SaaS roundup:

• Project management: Basecamp, Asana, Monday, Dubsado
• Accounting: QuickBooks, FreshBooks
• Collaboration and messaging: Slack
• CRM (Customer relationship management): Salesforce
• Direct automation: Zapier
• Payment management: HoneyBook
• Dotting i’s: Grammarly
• Private cloud hosting: IBM, GlobalLogic, Microsoft, Oracle

Thousands of SaaS solutions exist for specific industries, too, further promoting the SaaS-powered workplace. Companies need SaaS applications for day-to-day operations and to compete in this bustling digital landscape.

Companies must also jump on the automation train if competitors are enhancing productivity and engagement with SaaS tech.

4. SaaS companies that improve customer service and experience can improve customer lifetime value by 25%

Your customers don’t hope for accessible tech — they demand it. McKinsey tells us it’s vital for SaaS companies to make the entire customer journey, from start to finish, as customer-friendly and streamlined as possible.

We’re talking about easily accessible content and instructions, intuitive interfaces, and crystal-clear transparency on where those subscription dollars go. Many big SaaS companies see partnerships as a way to ensure customers get what they need.

The more convenient you can make things for your customers, the better. A good place to start? Optimize your SaaS company website with brand-related keywords, image tags, and quality content.

5. 78% of Companies Use More Than 4 SaaS Platforms

Data management and analysis are huge motivators for SaaS subscriptions. According to HireDNA, 96% of businesses use at least one SaaS platform while eight in 10 companies use more than 4 SaaS platforms. Clearly, data is a prominent interest across various industries in picking a SaaS solution.

What does that mean for your SaaS business or startup? You can start by looking for data-focused audiences that could use your product and market to them accordingly.

Data features are common in most SaaS solutions—even Amazon Prime. Ever notice how the platform recommends shows that pique your interest just enough to hit “play?” That’s based on data collected from your streaming behaviors.

6. Adobe Inc. is the top publicly traded U.S. SaaS company in 2024

Adobe is worth a staggering $259.2 billion, with revenue steadily growing yearly. Adobe’s success crowns it with the highest SaaS market share. The famous Adobe Creative Suite sits center stage in many companies’ marketing strategies, offering design services like Photoshop, Lightroom, and Adobe Premier.

Moreover, Adobe has a popular PDF editor that virtually every business can use. Did you know Adobe invented the PDF in 1993, a dramatically innovative solution for companies going paperless?

Clearly, Adobe is a SaaS leader with more and more services to meet their audience’s needs. The company is also famous for releasing open letters to their customers before significant changes. These marketing moves continue to be critical (and practical) in solidifying trust with Adobe’s audience.

Note: Some consider Apple the largest SaaS company, not Adobe. Technically, Apple is worth more at $2.65 trillion. However, the company is primarily a hardware brand, selling popular iPhones, laptops, and iPads.

However, some experts consider Apple in the SaaS conversation because of the company’s growing SaaS product base and increasing paid subscriptions, such as AppleCare, Apple Music, and Apple TV.

7. The global SaaS market has a compound annual growth rate (CAGR) of 27.5%

Which industries contribute to this whopping statistic? Fortune Business Insights gives credit to a few notable ones:
Retail, consumer goods, and ecommerce

• Healthcare
• Education
• Manufacturing
• Travel and hospitality
• Supply chain management

The report covers SaaS globally, examining market players in North America, Europe, Latin America, the Middle East and Africa, and Asia Pacific countries such as China, India, Japan, and Vietnam. SaaS market growth is coupled with emerging AI technology, machine learning, and virtualization, meeting growing needs for productivity, database management, and security.

The report also shows that rising public cloud computing services across large enterprises is one of the major factors that propel market growth and is a major part of modern Enterprise Resource Planning (ERP).

More enterprises are shifting to hybrid cloud and using on-premises solutions, and major players in the game are supporting the shift. For example, in 2022, Microsoft Azure hosted its first Marketplace Sumit, which will help independent software vendors and SaaS providers maximize market opportunities.

Is your brand in any of the above industries? Strategic ways to leverage this potential include harnessing the latest technologies to improve your services and using cloud-based software to expand your services to new global audiences.

8. New pricing models emerging in 2024 to combat lower budgets

Pricing has always been a barrier to entry for many businesses. In 2024, you can expect to see SaaS companies try to combat that by building more flexibility into their models.

“The market will see an increase in the diversification of pricing models. Because companies don’t have as much money as before, they’ll be cost conscious and will try to cut the excess, leading to more customized and granular pricing strategies being run,” says Lucas Bédout, CEO and Founder of Hyperline.

But what can you do when the value of a customer is lower than it was in the past? You might lean more heavily on your SEO and content marketing strategies while moving away from more costly strategies like paid search.

Writing helpful content that answers common questions will cement your role as an expert. Draw new users through detailed walkthroughs and comprehensive guides that set you apart from the competitors.

Let a content marketing agency take the reins and help you scale.

Pro tip: Wondering how to pick an agency? Always review case studies to verify results and visualize how they can help your business.

9. SaaS adoption is highest in marketing and advertising, technology, education, retail, financial services, ecommerce, and manufacturing

You don’t need us to tell you how easy it is to overspend on Google Ads and SEO — the problem is spending the budget on the wrong strategies (or on no strategy to begin with).

So, how do you maximize the value of your sales and marketing budget? The goal is to merge sales activities and use insights across multiple channels for a cohesive digital marketing strategy. McKinsey sees data collection as key, coupled with artificial intelligence and advanced analytics. We agree.

In fact, those goals sound a lot like what our proprietary marketing technology, ConversionIQ, can accomplish. By gathering actionable insights from campaigns, we can better target high-value audiences. Here are some problems we use ConversionIQ to solve:

• Siloed data
• Slow account red flags
• Uncertain paths for scaling
• Lackluster reporting
• Low average order values (AOV)

Interested? Here’s more info.

10. The average customer churn rate for SaaS businesses is 5%

Customer churn is a vital metric for the SaaS industry to monitor closely. It measures the rate at which customers stop subscribing to your service — all that hard work and marketing gone. Canceled subscriptions are a drag, but they tell you a lot about where you can improve.

For example, at what point in the journey are customers abandoning your business? Is it after one month? Two months? Maybe your onboarding is off.

CRM Dialer President Dimitri Akhrin tells Forbes about the power of re-engagement emails. Of course, we can channel re-engagement through many remarketing tactics, including emails and ads.

The bottom line? Customer retention is just as, if not more important, than acquisition. A little churn is normal, and even exceeding 5% could be OK as long as it’s temporarily part of a growth stage. But anything ongoing? It warrants an audit.

11. The healthcare SaaS market is expected to hit a $50 billion value by 2028

Healthcare is an industry primed for digital transformation. Innovative SaaS brands like CitiusTech, Veeva Systems, and MindBody have answered by offering unique database management capabilities for healthcare providers. MindBody differs slightly by offering an appointment platform for patients in the fitness and therapy realms.

How can you scale a healthcare SaaS business? Prioritize UX (user experience) and carefully consider your audience’s business requirements. You might need some support collecting accurate data to best inform your PPC ads.

12. The banking SaaS market is expected to hit $40 billion by 2029

Also referred to as BSaaS (banking software as a service), the possibilities are endless. From speeding up customer resolutions to visualizing data and increasing security, SaaS offers today’s bank the world on a silver platter.

Experts at Fortune Business Insights predict the shift heavily favoring large banks, with smaller ones playing catch-up. Of course, FinTech continues to find solutions not only for banking business models but also consumers.

Companies like Wave and Stripe help business owners with smooth payment processing, while Venmo business accounts make getting paid for business or casual events a whole lot easier.

SaaS and AI predictions

It’s hard to get away from the term AI these days, but how will it affect or change SaaS?

Increased security

In the age where it’s only a matter of time before a company will be hacked, AI will help SaaS companies improve their security. This is great news for providers and customers alike. Not only will data security prevent your data from ending up all over the web, it will also lead to cost reductions for the providers. Thus, leading to overall cost-effective solutions for all.

AI powered CRM and ERP systems will grow

Microsoft says we should be on the lookout for AI continuing to transform the way people work, especially when it comes to CRM and ERP systems. There will be an increase in AI to expand personalization, data driven strategies, and efficiency through automation.

AI will be at work behind the scenes

AI will continue to grow and assist in various processes. “I’m convinced that SaaS solutions will increasingly run on GPT, which we’ll start to regard as ubiquitously as AWS. Using LLMs to enhance these solutions will no longer be seen as innovative but will become the standard,” Caya (Jose Cayasso), CEO and Founder of Slidebean.

Low code will increase in popularity

A lot of legacy systems will become obsolete and low code will begin taking over. There are many use cases for this, but interpretation of big data will be an ideal place for this to continue to take hold due to scalability and ease of use.

The takeaway

As these stats show, today’s SaaS company faces endless opportunities for growth and success, as well as overspending and competition.

The best way to harmonize all of the channels and opportunities available is through a thoughtfully crafted, data-informed digital marketing strategy. Equipping yourself with these stats will help you better navigate the ever-shifting tides of the SaaS market and be set up for long-term growth.

What’s cramping your SaaS brand’s style? Are there too many prospects stuck on your free trial? Or perhaps a lot of traffic without conversions. Whatever your pain point, we’ve either faced it or have the right tech and expertise to blast through those obstacles and take your business to the next level. Want to know more?

We’d love to connect.

This article has been updated and was originally published in November 2022.