app.title

SaaS industry

Topic

The software-as-a-service industry. Its future was debated, with arguments for both significant market size compression due to AI-driven development and expansion due to AI automating new business functions.

entitydetail.created_at

8/19/2025, 9:38:48 PM

entitydetail.last_updated

8/20/2025, 5:04:27 AM

entitydetail.research_retrieved

8/19/2025, 9:42:11 PM

Summary

The Software as a Service (SaaS) industry is a prominent cloud computing service model where providers deliver application software to clients, managing all necessary resources, typically accessed via web applications. It fundamentally separates software ownership from its use, a model that began around 2000 and became the primary software deployment method by 2023. SaaS products commonly operate on rented Infrastructure as a Service (IaaS) or Platform as a Service (PaaS) systems, offering customers the perception of limitless computing resources at reduced costs due to economies of scale, often employing multi-tenant architectures. Revenue models predominantly include freemium, subscription, and usage-based fees. The industry is currently at a critical juncture, facing a significant debate regarding its future, with theories proposing either a "TAM compression" as AI potentially makes software development nearly free, or a "TAM expansion" driven by the emergence of new categories like AI Agents automating human labor, as highlighted in recent discussions about the broader software industrial complex.

Referenced in 1 Document
Research Data
Extracted Attributes
  • Model Type

    Cloud computing service model

  • Access Method

    Web application

  • Core Principle

    Separates software ownership from use

  • Revenue Models

    Freemium, Subscription, Usage-based fees

  • Development Focus

    Frequent testing and releases

  • Common Architecture

    Multi-tenant

  • VC Investment (2023)

    $90 billion

  • Typical Infrastructure

    Rented Infrastructure as a Service (IaaS) or Platform as a Service (PaaS) systems

  • Average SaaS Apps per Company

    112

  • Number of Companies (approx.)

    17,000

  • Market Value (2025 Projection)

    $299.07 billion

  • Market Value (2029 Projection)

    $793.1 billion

  • Leading Industry Sector (January 2024)

    Financial services software ($25.6 billion in revenue worldwide)

  • Projected Business Software Powered by SaaS (2025)

    85%

  • Projected New Digital Workloads on Cloud-Native Platforms (2025)

    95%

Timeline
  • SaaS use began. (Source: Wikipedia)

    2000-01-01

  • SaaS became the main form of software application deployment. (Source: Wikipedia)

    2023-01-01

  • Attracted $90 billion in Venture Capital investment. (Source: Web Search Results)

    2023-01-01

  • Average yearly deal size went up by 43% in the last quarter. (Source: Web Search Results)

    2023-10-01

  • Financial services software became the leading industry for SaaS companies with $25.6 billion in revenue worldwide. (Source: Web Search Results)

    2024-01-01

  • Projected market value of $250.8 billion. (Source: Web Search Results)

    2025-01-01

  • Projected to reach $299.07 billion. (Source: Web Search Results)

    2025-01-01

  • Projected that 95% of new digital workloads will be deployed on cloud-native platforms. (Source: Web Search Results)

    2025-01-01

  • Projected that SaaS will power 85% of all business software. (Source: Web Search Results)

    2025-01-01

  • Global SaaS market projected to hit $793.1 billion. (Source: Web Search Results)

    2029-01-01

Wikipedia
View on Wikipedia
Software as a service

Software as a service (SaaS ) is a cloud computing service model where the provider offers use of application software to a client and manages all needed physical and software resources. SaaS is usually accessed via a web application. Unlike other software delivery models, it separates "the possession and ownership of software from its use". SaaS use began around 2000, and by 2023 was the main form of software application deployment. Unlike most self-hosted software products, only one version of the software exists and only one operating system and configuration is supported. SaaS products typically run on rented infrastructure as a service (IaaS) or platform as a service (PaaS) systems including hardware and sometimes operating systems and middleware, to accommodate rapid increases in usage while providing instant and continuous availability to customers. SaaS customers have the abstraction of limitless computing resources, while economy of scale drives down the cost. SaaS architectures are typically multi-tenant; usually they share resources between clients for efficiency, but sometimes they offer a siloed environment for an additional fee. Common SaaS revenue models include freemium, subscription, and usage-based fees. Unlike traditional software, it is rarely possible to buy a perpetual license for a certain version of the software. There are no specific software development practices that distinguish SaaS from other application development, although there is often a focus on frequent testing and releases.

Web Search Results
  • The Future of SaaS: Top Trends and Predictions in 2025 and Beyond

    Conclusion ---------- The SaaS industry is on a trajectory of remarkable growth, brimming with potential for both established and emerging companies. Currently fueled by key trends like AI integration, a strong emphasis on customer success, and personalized experiences, the industry is also seeing significant advancements in technology and cybersecurity, alongside a rise in white label solutions and ESG initiatives. [...] For the SaaS industry, the adoption of vertical SaaS has only just begun. Think of Veeva, Procore, and Toast as examples of SaaS companies that have recently emerged. In Veeva’s instance, they offer cloud-based solutions for the pharmaceutical industry, which streamline drug development and clinical trials.

  • All 47 SaaS Statistics Every Business Leader Should Know

    Software as a Service (SaaS) has become the backbone of modern business operations, powering everything from customer relationship management to payroll. As more companies shift to cloud-based models, the SaaS industry continues to grow at an impressive pace. In 2025, it’s projected to reach $299.07 billion, driven by rising demand across industries and global markets. This growth goes beyond convenience, signaling a major shift in how companies adopt and manage technology. [...] 6. Financial services software is the leading industry for SaaS companies with $25.6 billion in revenue worldwide as of January 2024. 7. The financial services software sector has the largest global SaaS workforce, employing 133,100 people. 8. It’s projected that 95% of new digital workloads in 2025 will be deployed on cloud-native platforms. ### What These Numbers Mean For You [...] SaaS Statistics — Key Highlights -------------------------------- The global SaaS market is projected to hit $793.1 billion by 2029, with the U.S. alone expected to account for $445.59 billion of that total. SaaS will power 85% of all business software in 2025, marking a massive shift toward cloud-based solutions across industries. Companies now use an average of 112 SaaS apps, but 73% of employees don’t use their assigned licenses.

  • 2025's Top SaaS Trends to Watch - Zylo

    2025 SaaS Management Index Learn More The software-as-a-service (SaaS) industry continues to redefine how businesses operate and scale. As we enter 2025, the evolution of SaaS shows no signs of slowing down. With advancements in technology, shifts in market demands, and the growing reliance on cloud-based solutions, SaaS trends are shaping the future of digital transformation for companies worldwide. [...] The SaaS industry has experienced exponential growth over the past decade, evolving into a cornerstone of modern business operations. As of 2025, the SaaS market is valued at an estimated $250.8 billion, fueled by rising demand for scalable, cloud-based solutions across various industries. Companies are increasingly adopting SaaS to streamline operations, reduce costs, and enhance collaboration. ### 1. The Growth of SaaS [...] FacebookTwitterLinkedIn 01/08/2025 Table of Contents Toggle - [x] SaaS Industry Overview: The Current State of the Market 1. The Growth of SaaS 2. Resurgence of Mergers and Acquisitions 3. Startups and Emerging Players 4. Globalization and Expansion into New Markets Top SaaS Trends 5. AI Is Revolutionizing SaaS Solutions 6. Machine Learning Is Also Driving Advancement

  • SaaS Industry Trends Report 2024: A Comprehensive Overview

    2. General Trends of the SaaS Industry 2024 ------------------------------------------- The SaaS industry continued its rapid evolution in 2024, with several key trends shaping the industry. Growth is slower and harder than the zero interest rate environments a few years ago. The average yearly deal size went up by 43% in 2023 in the last quarter. However, this upward momentum appears to be continuing into 2024, but it's still less than what it was, on average, over the last four years. [...] The SaaS industry was dominated by several key categories in 2024, including Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Human Resource Management (HRM), Collaboration and Productivity Tools, and Marketing Automation. These categories accounted for significant market share and are projected to continue growing at double-digit rates in the coming years. Here it is more in detail: Image 19 6. Fastest Growing SaaS Categories ---------------------------------- [...] 3. Biggest Players in SaaS Market for 2024 ------------------------------------------ The top SaaS companies by market share in 2024 included Salesforce, Microsoft, Adobe, SAP, Oracle, ServiceNow, Zoom, Shopify, Atlassian, and HubSpot. These industry leaders reported strong growth, with Microsoft revenue increasing by 15.67%, ServiceNow revenue jumping 24.17% in Q2, and HubSpot seeing a 23.13% rise in revenue. Here are the top SaaS companies by market share and their growth trends:

  • 111 Unmissable SaaS Statistics for 2025 - Zylo

    The SaaS industry is dominated by several major companies that shape market trends and provide critical solutions across a wide range of industries. Below are key players in the SaaS space, along with notable statistics that illustrate their impact: ### Microsoft [...] 4. Venture Capital Investment: The SaaS industry continues to attract significant investment, with $90 billion in funding in 2023. This marks a 150% increase in investment over the past few years, highlighting the growing interest and confidence from investors​. 5. Startup Ecosystem: The SaaS sector is home to about 17,000 companies, with many new startups actively contributing to its dynamic growth​. [...] The SaaS market continues to demonstrate significant growth, with a trajectory that shows no signs of slowing. Here are some of the most important statistics that reflect the current state of the industry: