Why You Should Invest Now: Forecasted Industry Growth and Market Analysis
The global SaaS (Software-as-a-Service) market is at an all-time high due to the pandemic, as companies need quick and easy solutions for their businesses, that can be rolled out immediately. The subscription-based model that SaaS offers is shifting the one-time payment model that license software has. Combined with the increasing demand for new tech solutions are the main reasons why SaaS is booming. In 2020, SaaS solutions generated approximately $105 billion, and the upward trend will continue in the coming years, with plans to reach $140 billion by 2022.
Gartner Inc. is suggesting that the global economic downturn has forced companies to cut costs and find solutions that are more affordable, easy to implement, highly adaptable and can be cancelled at any time.
Here are the revenue estimates for the global cloud service market:
SaaS vs the other |
2019 |
2020 |
2021 |
2022 |
| Cloud Business Process Services (BPaaS) | 45.212 | 43.438 | 46.287 | 49.509 |
| Cloud Application Infrastructure Services (PaaS) | 37.512 | 43.498 | 57.337 | 72.022 |
| Cloud Application Services (SaaS) | 102.064 | 104.672 | 120.990 | 140.629 |
| Cloud Management and Security Services | 12.836 | 14.663 | 16.089 | 18.387 |
| Cloud System Infrastructure Services (IaaS) | 44.457 | 50.393 | 64.294 | 80.980 |
| Desktop as a Service (DaaS) | 616 | 1.203 | 1.951 | 2.535 |
| Total Addressable Market (TAM) | 242.697 | 257.867 | 306.948 | 364.062 |
The SaaS segment is the largest one in the cloud service market followed by IaaS (Infrastructure-as-a-Service). There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.
There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.
The following table presents the largest SaaS companies today ranked by their current market capitalization in $B.
The list does include Microsoft nor Oracle as most of their revenue comes from selling on-premises software.
All these established companies, and newer companies as well, often choose to re-direct their profits in the company, for further growth and market expansion and they do not pay out dividends. The re-directed profit is reflected in a rise in the price share and capital gains for the investors.
Sources:
https://www.datapine.com/blog/saas-trends/#:~:text=A%20Betterbuys%20report%20reveals%20that,significantly%20in%202021%20and%20beyond.
https://www.bmc.com/blogs/saas-growth-trends/
https://www.information-age.com/public-cloud-revenue-to-grow-6-3-in-2020-gartner-123490499/
https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020
https://finviz.com/
