Over the past few years, SaaS (Software as a Service) has been witnessing substantial growth at a rapid pace. Thanks to its evident advantage when it comes to innovation, security, usability, and cost, SaaS is now a target for many businesses trying to catch up with the rising sector.
We realize how performance metrics can be crucial to the success of any SaaS business, so in this article, we'll be helping you keep track of all the valuable data and statistics of the SaaS market.
Our goal is to assist marketing agencies and companies in achieving a better understanding of this thriving sector. We do it by collecting and listing all the scattered SaaS data and statistics in one place for your convenience.
Here's a collection of key SaaS marketing statistics sorted by categories.
SaaS Growth Statistics
SaaS Growth numbers and benchmark rates can provide valuable insight for software businesses in relevance to how widespread the use of SaaS applications is, as well as the effect of such expansion on the modern workplace.
- The average number of SaaS apps being used by various establishments has doubled up from 8 to 6 between the years 2015 and 2017. (BetterCloud)
- In the year 2018, the global workload of SaaS organizations reached $206 million. It's expected to continue growing and reach $380 million by the year 2021. (Statista/Cisco)
- During the period between 2019 and 2021, the global SaaS market is expected to be worth $60.36 billion, amounting to a 9% CAGR with the 4 years. (Technavio)
- Since the year 2010, the average money spent per company on SaaS apps has increased on a yearly basis. (Blissfully)
- In the year 2018, the average cost of SaaS subscriptions per employee was $2,884, which is higher than the cost of buying a new laptop (an Apple MacBook Pro at $1,299). (Blissfully)
- The forecast compound annual growth rate of the SaaS market is calculated to be 18%. (MarketsandMarkets)
- In the year 2007, there were only 500 apps for marketing. By the year 2017, the number of marketing apps grew to over 8,500. (PriceIntelligently)
- The lack of skilled workers, as well as cyber-attacks, could hinder the growth of the SaaS sector. (MarketsandMarkets)
SaaS Revenue Statistics
Keeping a close eye on the SaaS revenue statistics is an excellent method for business owners to get an idea of the true size of the SaaS sector, as well as the largest companies operating in this market.
- In 2018, SaaS organizations managed to generate an estimate of $72.2 billion. (Gartner)
- On a global scale, the revenues of the SaaS market are expected to reach a whopping $113.1 billion by the year 2021. (Gartner)
- According to revenue, Microsoft holds 18% of the SaaS market share, making it the largest provider of SaaS services across the world. The second place goes to Salesforce with 11.5%, and Adobe comes in third with 6.7%. (Synergy Research Group)
SaaS General Market Statistics
Here are a couple of SaaS general market statistics that you shouldn't miss out on:
- In terms of adoption, North America has the most mature SaaS market. (MarketsandMarkets)
- North America along with the Asia Pacific SaaS market will demonstrate the highest rate of growth. (MarketsandMarkets)
- To this date, 2018 was the best SaaS IPO year. It had 17 new public vendors accumulating a total of $5.1 billion, which is double the amount collected in the next highest year. (Battery)
SaaS Marketing and Sales Statistics
Marketing is a highly versatile domain where companies utilize different approaches to sell their products. It's not a one-size-fits-all strategy, and so, the outcomes can vary greatly.
SaaS marketing and sales statistics can help paint a clearer picture of how much it would cost to acquire a new customer as well as the types of techniques agencies tend to adopt.
- 48% of businesses reported an average contract length of 1 year, while 13% reported their typical contract being month to month. 11% of respondents reported having an average contract length of at least 3 years or more. (KBCM Technology Group)
- To acquire $1 of ARR (Annual Recurring Revenue) for a new customer, the median cost is $1.32. This cost can significantly drop down to $0.71 by adopting upselling strategies with already existing customers. (KBCM Technology Group)
- The median startup spends approximately 92% of its first average contract value on the sale, which translates into a payback period of 11 months on the CAC (customer acquisition cost). (Tom Tunguz)
- Having a global, widely popular brand on board as a customer is an effective way to add credibility and help general substantial revenue from second orders via referrals. (SaaStr)
SaaS Churn Statistics
Churn rate, which is the number of customers who stop doing business or discontinue their subscription to a service provider within a certain period of time, is a vital insight for any SaaS company or agency.
By monitoring churn statistics, questions such as "what's an acceptable churn rate?" and "what's the median churn rate for SaaS organizations" can be answered.
The following are key statistics on SaaS churn data and their effect on establishment revenue.
- According to the KBCM SaaS company survey in 2018, the median churn rate for SaaS organizations is 13.2%. (KBCM Technology Group)
- Depending on whether you measure revenue or customers, an acceptable annual churn rate lies between a range of 5% and 7%. (Sixteen Ventures)
- Tom Tunguz, a venture capitalist, notes that the yearly customer churn rates can vary from 6% to 10% acquiring enterprise organizations, while those that target SMBs (small/medium businesses), can reach up to 58%. (Tom Tunguz)
SaaS Business and Customer Statistics
With its inevitable growth, there's no doubt that SaaS has changed the global business scene. Cloud computing has enabled companies to take full advantage of automation at reduced expenses, some agencies attribute their emerging success to such platforms.
The following SaaS business and customer statistics can help you discern the impact of SaaS on the dynamics of workplace operation as well as the employee and customer experience.
- 38% of companies surveyed reported that they were already running almost completely on SaaS technologies. (BetterCloud)
- In organizations operating almost entirely on SaaS apps, reported that they experienced higher employee engagement. 86% of end-users accredit SaaS for helping them succeed more than other desktop alternatives. (BetterCloud)
- In the year 2017, the number of SaaS apps used by companies on average increased by 33% from the previous year. By the year 2020, 73% of organizations signified that almost all of their apps (80%+) will be SaaS. (BetterCloud)
- Salesforce, one of the largest SaaS organizations in the world, was ranked the number 1 best company to work for in the United States. (Fortune)
- 70% of active free trial users are likely to buy paid services after reaching out. (Invespcro)
- On average, companies running entirely on SaaS use 34 apps, which is 2.1× more than the typical workplace. (BetterCloud)
SaaS Pricing Strategies Statistics
The following SaaS pricing strategies statistics are a reliable way of figuring out their impact on the sector's profitability.
- 50% of SaaS organizations, up to this date, still rely on user-based pricing. (Cobloom)
- The most common free trial period is 1 month. (Cobloom)
- About 40% of SaaS companies take a value-based approach to set pricing. (OpenView Venture Partners)
- 30% of SaaS businesses charge based on usage. (OpenView Venture Partners)
- The golden number of paid packages is 3 (or low, medium, and high). Offering too few or too many products can risk confusing or losing customers. (2checkout)
The SaaS marketing statistics listed above can be beneficial for companies and businesses looking for ways to optimize their performance and boost their overall market growth. The listed data can also be highly valuable for any SaaS startup trying to adopt effective marketing and sales strategies.