Software-as-a-Service (SaaS) is a cloud computing model in which software applications are hosted by a third-party provider and made available to customers over the internet. SaaS is one of the fastest-growing segments of the technology industry, with a projected compound annual growth rate (CAGR) of 18.5% from 2021 to 2028, according to a report by The Insight Partners.
The report, titled “Software as a Service Market Growth Report (2022-2028),” examines the market for SaaS solutions across various industries, including healthcare, BFSI, retail, and IT & telecom. The report also analyzes market trends, drivers, challenges, and opportunities for growth in the SaaS market.
In 2020, the global SaaS market was valued at $120.77 billion and is expected to reach $462.94 billion by 2028. The increasing adoption of cloud-based solutions, rising demand for digital transformation, and growing use of mobile devices are some of the key factors driving the growth of the SaaS market.
Among the various industries, the healthcare sector is expected to have the highest CAGR during the forecast period. The increasing adoption of electronic health records (EHRs) and the need for remote patient monitoring and telemedicine services are driving the demand for SaaS solutions in the healthcare industry. Additionally, technology companies, communication providers, media companies, and financial service firms have been the most significant adopters of SaaS.
The report also highlights some of the key players in the SaaS market, including Microsoft Corporation, Salesforce, Oracle Corporation, SAP SE, and Adobe Inc. These companies are investing in product innovation and partnerships to expand their market presence and cater to the growing demand for SaaS solutions. Salesforce was the first to introduce the concept of SaaS and its benefits to the world. Originally, the company provided software for CRM applications, but it has since evolved into a fully SaaS-based CRM service provider.
Known for its advanced technology and well-developed internet infrastructure, the North American region, has experienced the greatest growth in SaaS adoption by various organizations. Europe is the second-largest user of SaaS solutions, while the APAC region, with a moderately developed internet infrastructure, lags behind these two regions. However, it is projected to have the highest CAGR during the forecast period.
The SaaS model enables the sharing of applications and provides organizations with access through a single-tenant or multi-tenant architecture in the cloud. The vendor hosts the applications and charges organizations on a pay-as-you-go basis, eliminating the additional costs of maintaining infrastructure for software storage in the traditional model.
Due to its numerous benefits, the SaaS model is replacing the traditional application service provider model and is being implemented in organizations through three different deployment models (private, public, and hybrid). While each model has its own advantages and disadvantages, the public cloud deployment model is the most widely adopted in the market. The global software as a service market is growing due to cost savings, reduced time to market for the product, and ease of use and implementation.