Though my main job has been providing content strategy to websites like DDPT, lately, I started working with the marketing and sales department SaaS app – https://serpwatch.io/ for over 5 months now.
So, I thought, why not share some elements of my research for that task.
First, let me share some highlights of my SaaS Industry. Then I will go into some other interesting details.
Highlights of SaaS Industry.
- Market Value: The Global SaaS market is set to reach $307.3B by 2026
- Biggest SaaS: Microsoft is the largest SaaS provider
- SaaS Adoption: 71% of companies are deploying SaaS apps
- SaaS Performance Metrics: 5-7% annual churn rate is acceptable.
Following this are other interesting details on
- How SaaS Marketing Works – numbers and stats-based info
- SaaS SEO, PPC
- How popular is Saas Industry – Category-wise numbers and demographics
- Growth and adoption metrics
- Some benchmarks to evaluate your SaaS app performance
- SaaS pricing – It makes a huge difference
SaaS Marketing Statistics
1. In 2018, Saas’s revenue surpassed projections by more than 10%.
According to the research report of Synergy, Saas accounts for only 20% of the software spending on the company. So, the Saas market may increase in the coming years. In the other 80% of the companies, we can expect more new SaaS solutions. (electronic)
2. What is the biggest SaaS company?.
The largest SaaS provider in the world is Microsoft. SaaS stats shows that the revenue of Microsoft is way greater with 18% of the market share. The tech giant has reported $10.1 billion in business processes and product revenue. Salesforce has the second top market share with 12% and $3.74 billion in revenue. (TechCrunch)
3. Salesforce is the biggest trading SaaS company with $10 billion in revenue.
Salesforce is said to be an industry pioneer. The market capitalization of the Salesforce is around $76 billion. ServiceNow and Workday are the next largest SaaS companies with market capitalizations of $20 billion and $22 billion. (thesoftwarereport)
4. To enhance the delivery speed, 71% of the companies are deploying SaaS.
One of the main reasons to adopt cloud-based SaaS is to increase the IT service delivery speed. According to a finance online report, 63% of companies opt for SaaS to be more flexible and 58% of the companies love SaaS as it allows business continuity. (tslmarketing)
5. 41% of the workloads could be on the public cloud by the end of 2020.
According to the current Software development stats, users still prefer to keep the workloads on-premise itself. By the end of 2020, 41% of the workloads could be on public cloud, 20% on the private cloud, and 22% on the hybrid. Then the workloads on-premise will be only 27%. (electronic)
6. How many SaaS companies are there globally?
There are around 7000 SaaS companies around the globe. According to the software development industry stats, the SaaS companies are nearly 7000 which generates a whopping $170 billion. Also, there are 1000 private SaaS companies. (electronic)
SaaS Growth Statistics
7. SaaS mobile marketing is expected to reach $7.4 billion by 2021.
The latest forecasts show that the revenue of the mobile SaaS marking was $4.4 billion in 2016. SMB(small and medium-sized businesses) mobile SaaS expected to jump from $16.5 billion in 2016 to $30.5 billion by 2021. The CAGR for corporate mobile SaaS is expected to be 11% and 13.1% for SMB mobile SaaS. (bloggingx)
8. By 2026, the total market size of the SaaS is projected around $307.3 billion.
The global SaaS market in 2020 is around $158 billion. It is expected to have a CAGR of 11.7% during 2020-2026. (PRNewswire)
9. The global SaaS workload is expected to reach 380 million by 2021.
The number of installations of cloud workloads are increasing. There were 206 million installations of workloads in 2018, and we are likely to reach a whopping 380 million by 2021. (medium)
10. 80% of the companies already use at least one SaaS application
The public has a variety of choices in choosing public clouds. 80% of the companies use at least one SaaS app. While 64% use PaaP apps and 48% use IaaS apps. (allthatsaas)
11. The SaaS adoption rate of the Healthcare industry grows at a rate of 20% per year.
In 2019, the Healthcare cloud computing market hit $23.4 billion at a CAGR of 17.2%. And is expected to reach $51.9 billion by 2024. (goodfirms)
12. Cloud SaaS is being adopted by 93% of CIOs(Chief Information Officers).
According to Deloitte, SaaS has been incorporated into nearly all leading enterprise software development. 54% of the CIOs plan to use the cloud for critical applications in the coming years. And 70% of them say that they have adopted cloud SaaS because of scalability and agility. (dzone)
13. How many companies are using SaaS Apps?
73% of the companies are expected to run entirely on SaaS by the end of 2020. The growth rates of SaaS are astonishing. According to the survey from BetterCloud, 38% of the organizations have already moved most of their apps to SaaS. (techrepublic)
SaaS Benchmarks
14. The average SaaS spending will get doubled
An average company spent $343,000 on SaaS in 2018 which is a 78% increase when compared to the previous year. According to reports, the number will continue to rise by 118% by the end of 2020. (yourstory)
15. SaaS incorporated businesses that spend an average of $2,884 per employee.
SaaS adoption and spendings rise continuously. For companies with 500 to a thousand employees, the average spending on employees for SaaS is $3570. Saas accounts for less than 15% of the total spending of a company and it is the reason why companies aim towards SaaS. (martechtoday
16. 22% of the IT budget will go to cloud-based services in 2020.
The largest portion, 33% of the IT budget, is allocated to hardware. And 22% and 29% of the budgets go for cloud and software every year. Only 15% is expected to go-to managed services. (spiceworks)
SaaS Churn Statistics
17. The median churn rate is 20% for SaaS businesses which make less than $10 million per year.
The churn rate for SaaS depends on business scale and maturity. Businesses that make more than $10 million have an average churn rate of 8.5%. Those businesses which make less than $10 million have a churn rate of a whopping 20%. (virayo)
18. Low growth companies have high churn rates of 42%.
The recent stats of the company growth show that 34% of the high-growth companies have churn rates of over 10%. While 39% of them experienced a low churn rate under 5%. (virayo)
19. What is good churn rate for SaaS businesses?
5-7% is the acceptable churn rate in a year. 69% of SaaS companies measure churn rates by the number of customers. The good churn rate on a monthly basis translates to 0.42 – 0.58%. This indicates that companies lose only 1 out of 200 customers per month. (sixteenventures)
20. The monthly retention rate for mobile app users is around 41.5%.
Mobile app customers have a 4 times higher chance for retention compared to web interface users. Investing in a mobile platform is a must as it gives a great user experience and high retention rates. (mixpanel)
21. 30% of SaaS companies have reported higher churn rates in recent years.
According to a SaaS report, 34% of users have decreased churn rates while 36% have no change. 30% of SaaS users reported that churn rates increased over 12 months. And the lucky 70% saw a decreased churn rate or no change at all. (slideshare)
SaaS Pricing
22. 39% of companies take a value-based approach.
The majority of companies charge based on the value. 26% of companies make a judgment call to set the prices, 25% of them copy competitors, and 10% take a cost-plus approach. (reforge)
23. 38% of the SaaS businesses charge based on usage.
Usage-based pricing is also the most popular model just like seat-based pricing. Companies that use usage-based pricing would say that their price and value align. (devsquad)
24. 31% of the businesses offer a small discount.
According to software industry statistics, SaaS companies are distancing themselves from the trend of offering discounts. 31% of companies offer small discounts and 38% provide an occasional discount of 10-25%. (bloggingx)
25. 1% increase in price can boost profits by 11.1%.
Price adjustment is the most effective strategy to improve revenue generation. Price management involves the alignment of primary value metrics. (austinstartups)
26. The cost to acquire $1 of annual recurring revenue (ARR) drops when using upselling strategies with existing customers.
The median cost to acquire $1 of ARR for a new customer is $1.32. The cost drops to $0.71 using upselling tactics. (cardconnect)
29. 38% of the SaaS Businesses prefer not to offer free trials for their product or service.
Freemium or free trials are quite popular among users. Freemium is not adopted by 38% of the companies and the reason is that it may cause harm more than good for some particular businesses. (saasmarketingtrends)
Stats on SaaS Security
30. The most important factors of the IT industry when buying SaaS apps are cost and security.
The top factors for IT experts consider when they buy SaaS apps cost with 59% and security with 47%. Customer support, integrations, Ease of use, admin, and management capabilities are also important. (bettercloud)
31. In SaaS Business services 18.1% of sensitive data files are uploaded to the cloud.
44.4% of the files are confidential documents. PII data accounts for 3.9%, password protected files make for 3.2%, email data exports make for 2.7%, payment information for 2.3%, while health information accounts for 1.6%. (skyhighnetworks)
32. Data security, leakage, and data loss (29%) and general security risks (28%) are the biggest concerns of cloud security.
GDPR implementation helped the SaaS industry in increasing privacy. Security concerns arise when the adoption of SaaS increases. (awsinsider)
33. What is the impact of COVID19 on SaaS Industry?
Based on enterprise SaaS applications Merger and acquisition data from Capstone Headwaters, In 2020 Quarter 2 the revenues for public targets grew by 3.7 times and for private targets by 3.3 times. Compared to 2018 and 2019 Q2 numbers, the growth rates are the lowest.