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SaaS (+IaaS and Paas) Market Stats

Not just a buzzword

SaaS is a popular buzzword in the 21st century. So much so that I even hear common consumers saying it out loud… “S A A S”.

I’m not sure if they always know what it means though 😉

The best layman question on SaaS I’ve heard is…“Is it an app in the cloud?”

“Yes” I answer… “ but so much more”

The acronym SaaS stands for Software as a Service

SaaS is becoming ubiquitous

38% of companies say that they are running almost completely on SaaS. And 73% of businesses plan to make all their systems SaaS by 2020 (According to State of the SaaS-Powered Workplace 2017).

So SaaS is becoming ubiquitous and whether you are in IT or work in a company you should know something about it. Because you may be choosing a new SaaS app for your department some day…soon!

SaaS is taking over the cloud computing market.

Gartner predicts that the SaaS cloud application services market will be $133B in 2021 and reach $151B in 2022.

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PaaS, SaaS, IaaS growth

Source: Gartner, Nov 2019 Press release

According to Gartner, Software as a service (SaaS) will remain the largest market segment, which is forecast to grow to $116 billion this year due to the scalability of subscription-based software.

What does it mean to be SaaS?

Lots of companies are trying to build SaaS products. Large in-house IT shops are even doing so.

But what does it mean to be SaaS? Here are some general characteristics:

· The user typically accesses the application over the web, as a service. They pay on a subscription basis, maybe monthly paid up front in an annual fee at times. They login and off they go.

· The user and his IT department doesn’t need to worry about where the application is hosted or buying hardware or software or installing the application. It just runs.

· The user and their IT department do not need to manage bug fixes or software updates. It gets updated automatically with new functionality behind the scenes.

Who are the biggest SaaS providers?

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The clear SaaS apps leader is Microsoft with Office 365 (who would have guessed). The big guys according to Synergy research Group are Salesforce, Adobe, SAP and Oracle as of Q1 2019.

But note that according to Okta ( a cloud identity company), the top four broadly used apps are Microsoft Office 365, Salesforce, Amazon Web Services, and G Suite as of October 2019. So don’t count out AWS and G Suite !

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What does a really good SaaS app look like?

SaaS apps are getting more and more popular. Its important to know what makes a really good SaaS app. By good I mean the following:

· Delivers what its users need

· Easy to use with a great user interface

· Able to be reliable; runs without going down and is error free i.e. not buggy

· Responsive performance — you don’t wait for 3 seconds after every “enter”

· Able to connect to other systems and communicate with them

· Well maintained and supported

· Secure — not easily broken into by hackers; protects its data privacy

· Reasonable cost and a measurable ROI

What kind of SaaS are companies running?

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Some interesting stats about SaaS:

According to State of the SaaS-Powered Workplace 2017

  • 34 — The average number of SaaS apps that companies use.
  • 38% of companies say that they are running almost completely on SaaS.
  • 73% of businesses plan to make all their systems SaaS by 2020
  • 86% of businesses that use SaaS significantly experience relatively higher employee engagement.
  • 59% of IT professionals consider cost when purchasing SaaS solutions.

According to SaaS Customer Acquisition — Statistics and Trends

  • 84% of new SaaS customers from free trials are unique website visitors.
  • 70% — The likelihood of active trial users contacted to buy paid service.

According to Entrepreneur, the fastest growing apps include cloud data platform Snowflake, Opsgenie, Google Cloud, and Splunk.

The End

And there you go. A 5 minute tour of the SaaS world. Stay SaaS informed.

If you have any questions please comment.

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