SaaS Industry Growth

SaaS Industry Growth

SaaS companies are filling niche roles in both the B2C and B2B spaces, presenting consumers with much-needed solutions to their pain points. Innovative SaaS companies are even developing fixes to problems we didn’t know existed. As digital growth continues to accelerate, we’ll only see software services become more integral to our daily lives. 

But SaaS solutions aren’t necessarily all fun and games—with a rapidly growing industry, and volatile tech trends like NFTs and generative AI, how can SaaS professionals understand (and stay ahead of) the ever-shifting landscape? One of the best ways is to attend SaaS conferences to keep up with the current industry trends and spark ideas for the next revolutionary solution. And that’s one of the biggest benefits to attending a cross-sector event: you never know what will get your wheels turning, leading to the next big thing. 

In this article we’ll explore the SaaS industry —feel free to skip around as needed:

With that all said, let’s get started!

Is the SaaS Industry Growing?

Yes, any way you look at it, the SaaS industry is growing rapidly—and it’s not showing any signs of slowing. According to Gartner, end-user spending on public cloud services is estimated to reach nearly $600 billion in 2023—more than $1 billion more than total spending in 2022 ($494.7 billion). The fact is, cloud and digital services are at the cornerstone of most businesses today, and the spending boom only proves it. 

Of course, spending isn’t the only way to measure growth. We can also look at the growth rate, market value, market size, and so many other key metrics. So what are the statistics for the SaaS market and overall industry outlook? We’ve put together this SaaS market overview that illustrates just how important—and competitive—the industry has become.

What Is the Growth Rate of SaaS?

Digital acceleration is causing rapid growth in the SaaS market. Estimated to be worth $167.53 billion in 2022, the SaaS market is anticipated to grow at a compound annual growth rate (CAGR) of 18.5% between 2022 and 2028. To put that in perspective, healthcare, which is another booming industry, has an estimated CAGR of 17.9% between 2023 and 2030. In other words, the SaaS industry growth rate is hot. With some amazing innovation and cross-collaboration coming out of the sector, we think there’s room for even more exponential growth in the future.

How Big is the Global SaaS Market Size?

There are more than 30,000 SaaS companies across the globe that are working in myriad segments to solve our problems, make our lives easier, and change the way we operate on a daily basis. And while more than 50% of all SaaS organizations are located within the United States, countries like the United Kingdom, Canada, Germany, France, and India have huge SaaS markets as well.

All of these companies support a global SaaS market size of more than $167 billion—a number that’s expected to grow to nearly $463 billion by 2028.

How Big is the US SaaS Market Size?

With roughly 17,000 SaaS companies, the United States has the lion’s share of the global SaaS market. How does that break down into market size? The US SaaS market has an estimated market value of roughly $108 billion—and it’s expected to grow to $225 billion by 2025.

What Are the Largest SaaS Market Segments?

While there are endless market segments in SaaS—and new ones being developed every year, it seems—some are certainly more popular than others. Some of the most popular software as a service niches include:

  • Customer Relationship Management (CRM)
  • Human Resources (HR)
  • Accounting and Billing
  • Enterprise Resource Planning (ERP)
  • Communication
  • E-Commerce 
  • Project Management
  • Email Marketing

The largest SaaS companies are household names at this point. You can’t go anywhere without hearing about some of the largest SaaS organizations like Adobe, Salesforce, Shopify, Intuit, Google, and Microsoft. But even small and mid-sized businesses and startups are making a splash. And at Rally—these are the companies we’re possibly most excited to talk to!

What Is the Future Growth of the SaaS Industry?

One recent source found that the SaaS industry’s value is projected to grow to $700 billion by 2030 in the United States with an annual growth rate of 18%. The global SaaS market is expected to follow a similar trend, according to McKinsey. With a current worth of $3 trillion, estimates show that it is likely to grow to $10 trillion by 2030. 

Why is SaaS Becoming So Popular?

SaaS solutions have a lot of benefits that savvy CEOs are attracted to, with the major ones being: 

  • Scalability and agility
  • Lower overhead and logistical costs

Cloud-based solutions have unparalleled scalability and agility—with flexible solutions, SaaS is attractive for your customers as they can typically select the right level for their needs. And, once their company grows, move up to the next level of SaaS package. Need to cut back? No problem. Most SaaS companies are subscription-based, allowing for efficient scaling up (or down). In fact, 70% of CIOs report scalability and agility as motivating factors for using SaaS products. Not to mention that companies who use cloud platforms find that they can bring new capabilities to market 20-40% faster.

Lower overhead and logistical costs make SaaS the perfect choice for budget-conscious businesses since you’re reducing spend on hardware, software, and individual licensing. Since your solutions don’t come with expensive maintenance or installation costs, IT spend for businesses is dramatically reduced. 

What Is the Future of the SaaS Market?

The future of the SaaS market will be born out of innovation and cross-collaboration—while the overall industry trends for SaaS are extremely positive, it’s important to note that not all SaaS companies are created equal. With high inflation and volatile economic conditions worldwide, CEOs are always looking to cut costs and eliminate unnecessary spending. For some SaaS companies, this means their livelihood is at risk.

So how can you futureproof as a SaaS industry expert? Innovation! Of course, that’s easier said than done, but there are plenty of ways you can spark your next big idea. A great start is to attend a cross-collaboration conference, like the Rally Innovation Conference.

Get out of your silo and discover a vibrant melting pot at Rally where we bring together business owners, investors, venture capitalists, and industry experts from five different industries. You’ll find plenty of opportunity for intentional collaboration as we bring together the private sector, public sector, and disparate stakeholders from around the world. We’ll have six industry studios, focused on:

  1. Software | Explore topics like artificial intelligence, blockchain, and cybersecurity at Rally, with a focus on tech innovations “that rethink how to solve B2B, ecosystem, and B2C challenges and create new opportunities.”
  2. Agriculture & Food | Delve into questions about protecting our natural resources, improving operational efficiency, and preserving and ensuring ongoing animal and plant health.
  3. Healthcare | Dive into industry concerns like rising costs and shrinking headcounts, and learn how this industry is moving forward with featured technologies in medicine, digital therapeutics, and diagnostics.
  4. HardTech | Interested in topics like Industry 4.0 or IoT? Check out our hardtech studio for these innovative conversations.
  5. SportsTech | Explore the new frontier of sports, with “phygital” environments leading to advancements in training, coaching, data technology, and safety features. 
  6. Entrepreneurship | Ready to talk about innovation, leadership, and strategies to pull inspiration from cross-collaboration? That’s what you’ll find in this studio at Rally.

One of Top B2B SaaS Events: Rally!

Ready to get inspired? Excited for the largest global cross-sector innovation conference? Welcome to the Rally Innovation Conference, held in Indianapolis, IN annually. We’re forging cross-sector connections between companies, entrepreneurs, investors, and universities from across the globe, not to mention our $5M cash IN-Prize pitch competition, 1:1 investor meetups, a demo arena, keynotes, content sessions, and more!

Check out our run of show, learn more about our pitch competition, and get registered (while there are still spots available!). Futureproof your SaaS solutions at Rally!