This article provides 50+ insightful software-as-a-service (SaaS) statistics, facts, and trends for 2023.

saas stats facts trends

Organizations are increasingly using SaaS applications in their business operations. But just how popular is SaaS, and how fast is the industry growing?

Discover the latest SaaS stats below for a data-driven look at the size, growth trajectory, business models, and future trends shaping this rapidly evolving on-demand software market.

Market Growth and Predictions

  1. The global SaaS market is projected to grow from $212.20 billion in 2021 to $240.61 billion in 2022 at a CAGR of 13.4% and reach $374.48 billion by 2026 at a CAGR of 11.7%.
  2. The SaaS industry has increased in size by around 500% over the past seven years, and as of 2023, it is worth over $195 billion.
  3. By 2025, it is estimated that 85% of business apps will be SaaS-based.
  4. The SaaS market is expected to grow to $700 billion by 2030.
  5. The SaaS market is currently growing by 18% each year.
  6. Nearly 78% of small businesses have already invested in SaaS options.
  7. 70% of CIOs claim that agility and scalability are two of the top motivators for using SaaS applications.
  8. As of 2023, 56.67% of all SaaS companies in the world are located in the United States.
  9. The average growth rate of spending on SaaS products is 58%.
  10. SaaS adoption in the healthcare industry is growing at a rate of 20% per year.
  11. The use of artificial intelligence in SaaS solutions is expected to grow at a CAGR of 40.2% from 2021 to 2026.
  12. The Asia-Pacific SaaS market is anticipated to grow at the fastest rate, 12.1% annually, from 2022 to 2030.
  13. China and India contribute positively to the growth of the Asia-Pacific SaaS market.
  14. The productivity software segment is expected to grow at a significant CAGR of 10.6% during the forecast period

Revenue Models and User Adoption

  1. 39% of SaaS companies use value-based pricing, while 38% charge based on usage and 50% charge per user.
  2. Time to value, customer lifetime value, product activation rate, feature adoption rate, and customer engagement score are the 5 most important product adoption metrics to track.
  3. 84% organize pricing packages low to high, 9% high to low, 54% offer annual pricing plans, and 39% have public pricing information.
  4. Nearly 80% of SaaS companies change pricing at least annually, most change multiple times per year
  5. 31% offer a small discount, and 38% offer occasional 10-25% discounts.
  6. SaaS companies estimate an 11% profit increase from a 1% price raise.
  7. 65.5% offer a free trial/demo, 12% have a free plan, and 12.5% offer both.
  8. Organizations with more than 1,000 employees use 150+ SaaS applications.
  9. Companies are using an average of 130 SaaS apps.
  10. Only 36% of traditional companies allocate a budget to SaaS solutions and operations, while 44% of transitioning organizations set aside a budget for SaaS.
  11. Freemium SaaS tools convert 25% more customers without the need for sales than free trials.

SaaS in the United States

  1. The US has approximately 8x more SaaS companies than any other country.
  2. The SaaS industry in the United States has a market size of $186.6 billion.
  3. The US SaaS market is expected to grow at a CAGR of 19.7% between 2021 and 2029.
  4. As of 2023, 56.67% of all SaaS companies in the world are located in the United States.
  5. The median revenue growth rate of 100 public SaaS companies in the United States with revenues above $100 million was 22% as of mid-2021.

SaaS Business Metrics

  1. The average customer acquisition cost (CAC) for a small B2B SaaS financial company is $1,450, while at the enterprise level, the cost is $14,772.
  2. In the SaaS healthcare sector, the CAC is $921 for small B2B companies and $11,021 at the enterprise level.
  3. Vertical SaaS can reduce sales and marketing resource costs by up to 22%, according to research. The focused approach requires fewer human resources.
  4. Vertical SaaS makes fulfilling customer requirements up to 8x easier. Industry specialization enables more tailored and relevant solutions.
  5. The median public SaaS valuation multiple, as measured by the SaaS Capital Index™ (SCI), is 7.2x current run-rate ARR.
  6. The average churn rate for SaaS companies is around 10-14% annually, depending on the type of churn being measured.
  7. The median SaaS company’s revenue growth slowed to 20% YoY by Q3 2020.
  8. In 2015-2020, a median SaaS company was valued at around 5.2x Revenue.
  9. The median valuation multiple in M&A deals grew only slightly from 5.8x to 6.4x during the 2020-2021 period.
  10. In 2022, the median valuation multiple declined back to 5.7x, in line with the figures from 2018-2020.
  11. The average net MRR growth rate for SaaS companies is between 10-20%.
  12. The average SaaS company spends 118% of its revenue on sales and marketing in its first five years.
  13. The average SaaS company takes 3 years to reach $1 million in annual recurring revenue (ARR).

SaaS Industry Trends

  1. The integration of IoT with SaaS solutions is expected to drive significant growth in the SaaS market, with applications in smart cities, connected cars, and industrial automation.
  2. The adoption of blockchain technology in SaaS solutions is expected to increase, with applications in supply chain management, data security, and smart contracts.
  3. The rollout of 5G networks is expected to drive further growth in the SaaS market, enabling faster data transfer speeds and improved connectivity for SaaS applications.
  4. The rise of remote work has led to increased demand for SaaS solutions that enable collaboration, communication, and productivity for distributed teams.
  5. The increased focus on data privacy, security and compliance in SaaS products is driving companies to invest in advanced encryption and data protection measures.
  6. The adoption of microservices architecture in SaaS solutions is increasing, enabling greater flexibility, scalability, and faster development cycles.
  7. API integration is becoming a critical component of SaaS solutions, allowing seamless connectivity between different applications and services.
  8. The rise of low-code and no-code platforms is enabling businesses to develop and deploy custom SaaS applications with minimal technical expertise.
  9. The growth of mobile applications is driving the demand for SaaS solutions that are optimized for mobile devices and offer seamless cross-platform functionality.
  10. Subscription billing is becoming an increasingly important aspect of SaaS revenue models, with companies investing in advanced billing and revenue management solutions.
  11. The importance of customer support in SaaS businesses is growing, with companies investing in dedicated support teams and tools to ensure customer satisfaction and retention.
  12. User experience is becoming a critical differentiator for SaaS products, with companies investing in UX design and research to optimize product usability and customer satisfaction.
  13. The increasing demand for cloud-based solutions is a major factor driving the growth of the SaaS industry.
  14. The need for cost-effective and scalable software solutions is also contributing to the growth of the SaaS market.
  15. The growing adoption of digital transformation initiatives by businesses across various industries is fueling the demand for SaaS solutions.
  16. The increasing availability of high-speed internet and the proliferation of mobile devices are also contributing to the growth of the SaaS market.
  17. The growing need for businesses to improve operational efficiency and streamline processes is driving the adoption of SaaS solutions.
  18. The rising demand for data-driven decision-making and advanced analytics capabilities is also contributing to the growth of the SaaS industry.
  19. The increasing adoption of emerging technologies, such as artificial intelligence, machine learning, and the Internet of Things (IoT), is driving the demand for SaaS solutions that incorporate these technologies.
  20. The growing demand for industry-specific SaaS solutions presents an opportunity for businesses to develop and offer tailored solutions that cater to the unique needs and requirements of different industries.

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Will Zhao

Will Zhao is a seasoned technology expert and entrepreneur and has spent over a decade working at leading tech companies like Facebook and Airbnb. His expertise spans various domains in the tech industry, including product development and growth, machine learning / AI, and cloud infrastructure. Inspired by his passion for empowering individuals and businesses, Will founded SoftGist to provide expert insights that help people navigate the complexities of technology and succeed in the tech and business world. Will holds a Master of Information Technology from Carnegie Mellon University.

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