Digital disruption continues to transform the way we do business. One of the biggest disruptors in the last few years has been the emergence of Software as a Service (SaaS). Due to the automation capabilities of SaaS, these solutions have become cornerstone technologies for individual consumers and businesses the world over.
Today, there’s a SaaS solution for almost every industry, and if there isn’t one yet, it’s likely coming soon. So, it’s not surprising that the market is enjoying a boom that shows no signs of slowing down.
A quick glance at the numbers shows:
- Public cloud application services/SaaS end-user spending increased from $167.34 billion in 2022 to $197.29 billion.
- Projected worldwide end-user spending on public cloud application services/SaaS is projected to reach $232.3 billion in 2024.
- SaaS revenue is set to reach make up 81% of the enterprise software market by 2030.
- IT-sanctioned SaaS apps increased tenfold between 2015 and 2023.
- Using SaaS products, 59% of U.S. workers can now work from home.
- Salesforce is the largest SaaS company, followed by Adobe and Intuit.
- Approximately 60% of the world’s 25,000 SaaS companies are in the U.S.
- Asia-Pacific is predicted to be the world’s fastest-growing SaaS market in the next decade.
- 91% of organizations believe SaaS will help them adopt emerging technologies in 2024 and beyond.
- Major trends set to impact the SaaS industry in 2024 include AI, personalization, UGC, and interactive content.
There are numerous factors that have accelerated the growth of SaaS, including the post-pandemic increase in the number of remote workers and the greater push toward automation and the adoption of emerging technologies. The ability to access SaaS solutions online rather than via hardware and other traditional technologies is also a major factor in the continued growth of software as a service.
Let’s take a closer look at some of the most impressive SaaS stats for 2023 and 2024 and the trends we can expect to see.
Statistics Reveal SaaS Trends
SaaS statistics from 2022 and 2023 reveal a number of interesting trends around money raised, the most searched-for jobs, staff sizes, and sectors. They also tell us more about AI penetration, marketing channel budgets, the most popular CMS platforms, and the state of SaaS in different countries. By looking at the major SaaS trends predicted for 2024, we can also gain a better idea of where the industry is headed.
Money Raised for SaaS Companies
SaaS has risen to become venture capital’s most prominent investment category. According to Dealroom, 47% of venture capital was invested in SaaS business model startups. This increase in investment has been particularly obvious in early-stage investing, as can be seen from the fact that SaaS companies received more than half of the total early-stage venture capital investment in 2022.
Total investment, as well as round count into startups, increased in 2022. SaaS companies saw a 30% increase in total venture capital investment and a 6% increase in the number of early-stage investment rounds between 2021 and 2022.
Let’s break this down a little further:
- Early-stage venture capital investment in SaaS startups doubled between 2019 ($4 billion) and 2022 ($9 billion).
- Breakout stage venture capital investment, as well as the number of rounds, increased significantly between 2019 ($9 billion) and 2022 ($24 billion).
- Between 2009-2019 the increase in venture capital investment in SaaS grew from $7 billion to $44 billion. However, venture capital investment in scaleup or late-stage SaaS saw a decrease in 2022, at least in the U.S.’s Bay Area. Investment into SaaS companies for rounds over $250 million plunged by 50%, while investment into companies for rounds between $100-250 million dropped by 30%.
Private equity funding has also increased since 2021. As of September 2023, there are 266 organizations with private equity funding. According to recent statistics, 179 of those organizations now have more than $1 million in revenue.
Most Common SaaS Job Searches
Continued growth has led to increased interest in SaaS-related positions, and statistics from 2022 and 2023 make it clear which positions job seekers are looking for. CSG Talent states that the five most searched SaaS jobs in 2022 are:
- Marketing Manager
- SaaS Product Manager
- SaaS Sales Engineer
- SaaS Project Manager
- SaaS Business Development Manager
According to ZipRecruiter, the five most searched SaaS jobs in 2023 are:
- SaaS Sales
- SaaS Developer
- SaaS Business Developer
- SaaS Engineer
- SaaS Software Sales
SaaS Company Staff Sizes
Robust increases in SaaS company staff sizes over the last couple of years further underscore the growth driven by increased investment and adoption of SaaS solutions around the world. We can see good examples of the growth in employee numbers by looking at a few statistics related to five of the world’s biggest SaaS companies:
Salesforce: In 2022, Salesforce employed 73,541 employees, which was a 29.92% increase from 2021. By mid-2023, the number of Salesforce employees increased by 7.95% to 79,390.
Adobe: At the beginning of 2022, Adobe employed 29,239 employees, which was a 12.51% increase from 2021. By the end of 2022, the number of Adobe employees grew to 35,130.
Atlassian: In 2021, Atlassian had 6,443 employees globally. By August 2022, this number had skyrocketed to 8,813.
Hubspot: By the end of 2022, Hubspot’s total number of employees was 7,433. This was a 26.09% increase from 2021, which saw 5,895 employees working for the SaaS company.
Shopify: As of September 2023, Shopify has 17,319 employees. This is a huge leap in comparison to the 11,600 employees it had on December 31, 2022.
Sectors With Highest SaaS Adoption Rates
According to MarketSplash, the top three industries with the highest adoption rates of SaaS solutions in 2023 were:
- Professional Services
Penetration of AI
The diverse applications of various solutions are leading to SaaS becoming a key enabler of emerging technologies, such as artificial intelligence (AI). According to Oracle, 91% of organizations believe that SaaS will play an important role in their adoption of AI, the Internet of Things (IoT), augmented reality, virtual reality, blockchain, and digital assistants.
Two examples of the relationship between SaaS and AI include:
Seedata.io: One of 2022’s fastest-growing startups, Seedata.io uses AI for security purposes. The SaaS-based security platform uses AI to identify incidents before they pose a risk to vulnerable data.
Grammarly: Grammarly offers real-time language and grammar suggestions, helping users enhance their written communication. The SaaS-based text editor is powered by AI.
Let’s explore a few more AI-related SaaS statistics from 2022 and 2023:
- 2022 saw $104 billion equity investment go to AI applications, with $5 billion allocated specifically for generative AI.
- Q1 2023 saw businesses purchase 4% more AI features than in Q4 2022, demonstrating increased demand for AI-powered tools.
- In Europe, 35% of all AI/ML funding went to generative AI, which set a record high in 2023.
Marketing Channel Budgets
Marketing spend and marketing channel budgets vary considerably according to a SaaS company’s growth stage. As of the beginning of 2023, the typical marketing spend as a percentage of revenue across different growth stages, according to DataDab, was:
|SaaS Marketing Budget Allocation||Early-Stage Startup||High-Growth SaaS|
|PR & outreach||10-20%||5-15%|
|Conferences & events||10-20%||<10%|
|Website & funnel optimization||10-20%||10-20%|
|Other (Surveys, Swag, etc.)||<10%||<10%|
|Total marketing spend as a percentage of revenue||20-50%||25-60%|
Most Popular SaaS CMS Platforms
According to G2, the top five SaaS CMS platforms of 2023 had an aggregate market share of more than 75%. The top five CMS platforms and their market share include:
|Content Management System (CMS)||Market Share|
SaaS Around the World
Although adoption around the world isn’t uniform, it certainly is gaining momentum. In some regions, SaaS has a solid position in business-to-business (B2B) and business-to-consumer (B2C) domains, while in other regions, it’s just beginning to gain a foothold.
North America: North America is home to the world’s most advanced market. The world’s largest SaaS vendors, including Google, Microsoft, and Adobe, among others, are based in the region. As of 2022, there were 17,000 organizations in the U.S., which accounted for approximately 60% of the world’s SaaS organizations.
Europe: Intense growth is forecasted for the European SaaS market until at least 2025. As of 2022, 42% of EU enterprises used cloud-based technologies. This represents a 6% increase in the number of EU-based enterprises which used cloud-based technologies in 2020 when only 36% of companies used cloud-based tech.
German SaaS market value is expected to grow from €6.85 billion in 2022 to €16.3 billion in 2025. France saw segment revenue reach an approximate US$6.82 billion in 2022. If French SaaS companies’ annual growth reaches the predicted 10.65%, the market volume should swell to $10.22 billion by 2026. By the beginning of 2022, the UK SaaS market had generated approximately $10.2 billion in revenue. This figure is expected to reach $16.47 billion by 2026.
India: India’s SaaS industry is expected to grow from the current approximately $50 billion to $70 billion by 2023, which would see it win 4-6% of the global market. This growth is predicted to continue into 2024 and beyond, with revenue expected to reach $26 billion by 2026 according to a report by Chiratae Ventures.
Asia-Pacific Region: Japan is the SaaS leader in the Asia-Pacific region, as it accounts for 40% or more of the region’s spending. Overall, the Asia-Pacific market is predicted to be the fastest growing globally over the next decade, with a projected CAGR of 16.1%.
Looking Ahead: SaaS Trends For 2024
Looking at the trends for 2022 and 2023, it’s clear that SaaS continues to gain momentum around the world. The only way for businesses and companies to stay ahead, drive growth, and engage their audience effectively is to embrace the trends that have already begun to emerge. Here are the top SaaS trends predicted to become major influences in the industry in 2024.
Chatbots and AI-Powered Support
An increasing number of businesses, SaaS companies among them, are introducing chatbots and AI-powered support into their customer support processes and marketing routines. The global chatbot market is expected to reach a staggering $994 million in 2024.
Given that customer support is a key aspect of the SaaS industry and that more and more customers are becoming accustomed to using chatbots and AI-powered support, SaaS companies cannot afford to ignore this trend in 2024. We can expect to see more companies use these technologies to streamline support processes and to improve customer experience by guiding users through troubleshooting or onboarding processes, answering frequently asked questions, and providing immediate assistance.
By identifying patterns, analyzing queries, and providing pertinent information and solutions, AI-powered support systems also reduce the need for human intervention. In addition to reducing response times and enhancing customer satisfaction, SaaS companies can focus their human resources on more complex work.
Voice Search Optimization
The increased adoption of voice assistants and smart speakers continues to boost voice search. As of 2023, there are 4.2 billion voice assistants in use, and this number is expected to soar to 8.4 billion by 2024. More than 1 billion voice searches take place every month. 2024 will see the voice search optimization trend emerge strongly, with companies optimizing their content for queries made via voice search.
This optimization includes targeting long-tail keywords, structuring content to answer frequently asked voice search questions, and using conversational language. SaaS companies that adapt their content for voice search will be more discoverable and accessible to customers who use voice-enabled devices.
In 2023, 53% of marketers said they planned to increase investment in interactive content. Static content had its day, and that day is over. The customers of today and tomorrow want interaction, and nothing less will captivate them. Interactive content, such as assessments, calculators, polls, and quizzes for customers, will gain popularity among SaaS companies in 2024. In addition to entertaining and educating customers, these interactive content formats will provide companies with valuable audience data insights.
SaaS companies that welcome this trend in 2024 will engage their customers, gain valuable feedback and insights, and provide customer response-based personalized recommendations.
Video content is expected to account for 82.5% of all web traffic in 2023, making it the internet’s most popular content type. The dominance of video will continue to be felt in 2024, so it makes sense that increased video content strategy adoption among SaaS companies is set to become a major trend.
We should see more companies use video marketing to offer tutorials, showcase products, and share user-generated content and customer success stories, thereby connecting with their customers more effectively.
Personalization has been a hot topic for the past few years. As many as 90% of leading marketers say personalization contributes significantly to business profitability. So, it’s not surprising that 2024 will see a growing number of SaaS companies use automation and advanced data analytics to provide highly personalized content experiences to their customers.
Companies who embrace this trend and tailor content to their customers’ individual behavior, needs, and preferences can expect to build stronger relationships, increase conversion rates, and improve customer engagement.
User-generated content (UGC) is set to be among one of the top SaaS trends for 2024. 93% of marketers agree that customers trust content that other customers create more than content that brands create. 2024 should see a growing number of SaaS companies actively encouraging customers to create and share product- and service-related content such as case studies, reviews, social media posts, and testimonials.
Using this trend of highlighting authentic user experiences to their benefit, companies can leverage social proof to attract potential customers.
By 2025, 72% of people around the world (approximately 3.7 billion people) are expected to access the internet via smartphone only. Given this substantial number, more SaaS companies will embrace the major trend of adopting a mobile-first strategy. These strategies should lead to the creation of SaaS solutions that can be accessed via smartphones before they can be accessed via a computer.
SaaS companies that respond effectively to this trend will buck the current trend of simply updating applications to make them more mobile-friendly. In doing so, they will better align with user behavior and grow in popularity.
Data-Driven Content Marketing
In 2023, businesses that used data-driven strategies saw between five and eight times as much ROI than businesses that didn’t. Over the last few years, data analytics in marketing strategies has been a major ongoing trend across many industries, SaaS among them. This trend will continue to help shape marketing strategies in 2024.
Companies will use data-driven insights to form their content marketing strategies that are targeted, featuring relevant content that their audience can connect with. To do this, companies will analyze customer preferences and behavior, as well as market trends. SaaS companies can use this trend to ensure they deliver the right message to the right audience at the most appropriate time.
Social Responsibility and Sustainability
54% of global consumers considered a company’s corporate social responsibility (CSR) practices when making purchasing decisions in 2023. There is no doubt that social responsibility and sustainability have a growing influence on consumer decision-making. A growing number of SaaS companies are acknowledging that they must adopt these values and include them in content marketing strategies in 2024 and beyond.
In 2024, more companies will showcase their commitment to charitable initiatives, community engagement programs, diversity and inclusion, and social causes. Companies also will highlight their carbon-neutral operations, energy-efficient data centers, and other green practices. The companies that embrace this SaaS trend for 2024 and going forward will set themselves apart from competitors, build a more positive brand image, and connect and engage with socially and environmentally conscious customers.
A SaaS-Focused Future
With SaaS revenue expected to grow at a CAGR of 21% until 2030 and to claim 81% of the enterprise software market, there’s little doubt it’s becoming all-pervasive and disrupting every sector, from big businesses to remote workers. This disruption is hugely positive, and it opens the door to many employment opportunities, innovations, and advancements.
As these statistics and SaaS trends illustrate, the market continues to move onwards and upwards. In light of this, adoption will become essential for businesses that don’t want to get left behind. With so many applications and so much potential, the growth of the SaaS industry is undeniably on an upward trajectory that shows little sign of slowing down.