Today in this post, I am going to present to you some important SaaS statistics.
If you are in the SaaS business, knowing some SaaS stats and its benchmarks would be really helpful to improve your SaaS business.
The cloud-based SaaS software industry is booming and will continue to boom.
Let’s look at the interesting SaaS statistics.
Editor’s picks:
- 73% of the businesses said that all of their apps would be SaaS by 2020.
- SaaS market is expected to hit $157 billion in 2020.
- Mobile market SaaS is expected to be worth $7.4 billion by 2021.
- Around 85% of small businesses will invest in SaaS solutions.
- 55% of SaaS companies feel that customer retention cost is the most important metric.
- SaaS market is growing at 6.5x as fast as the world economy.
- 70% of CIOs are attracted to cloud-based SaaS for scalability.
- The SaaS market is expected to reach $623 billion by 2023.
- 86% of businesses using SaaS saw an increase in employee engagement.
- Around 10,000 private SaaS companies generate less than $3 million in revenue.
- For 54% of the SaaS companies, upselling and add-on sales were a high priority for growth.
- The private SaaS companies with less than $10M in revenue, have the median churn rate of 20%.
- 50% of the fastest-growing SaaS companies have achieved more upsells than their competitors.
- There are over 10000 private SaaS companies that generate $3 million in revenue.
- 39% of the companies fix the price for the products with a value-based approach.
- Over 54% of SaaS companies are offering annual pricing plans.
SaaS growth statistics
- 55% of the SAAS companies consider Customer Retention Cost as the key factor for measurement.
- 73% of the businesses said that all of their apps would be SaaS by 2020.
- By 2021, the SaaS workload will reach 380 million.
- 93% of the CIOs have planned to adopt cloud SaaS.
- 89% of the SaaS businesses have said that new customer acquisition was the main thing that contributed to their growth. While “Existing Customer Renewals” is the top priority for 56% of the companies.
- For 54% of the SaaS companies, upselling and add-on sales were a high priority for growth.
- SaaS in the healthcare industry is growing at a rate of 20% a year and it hit $23.4 billion in 2019.
- For SaaS companies, $1.18 is the median cost to acquire a dollar on new customers.
- The SaaS companies which use public marketplaces have an Average Revenue Per Employee of $200,000.
- The private SaaS companies with less than $10M in revenue, have the median churn rate of 20%.
- Over the last 12-months, 36% of the companies have succeeded in reducing the churn rates, while 34% managed to keep their churn rates constant.
- It is found that 80% of the businesses are already using at least one of the SaaS applications. On the other hand, 48% use more than one SaaS application.
- The revenue from mobile SaaS marketing is estimated to reach $7.4 billion by 2021.
- It is up from $4.4 billion in 2016.
- The SMB mobile SaaS was worth $16.5B in 2016 and is expected to reach $30.5 billion by 2021.
- 50% of the fastest-growing SaaS companies have achieved more upsells than their competitors.
- SaaS companies with more than $75million yearly revenue are 2.5x more likely to achieve higher upsells than the small companies.
SaaS market is estimated to hit $157 billion in 2020:
As per the study, the SaaS market hit a $141 billion figure in 2019. The Saas industry is growing at a faster rate than expected.
- Salesforce is an industry pioneer that generates more than $10 billion in annual revenue.
- Salesforce has a market capitalization of $76 billion
- There are over 10000 private SaaS companies that generate $3 million in revenue.
71% of the IT businesses are using cloud-based SaaS to enhance their delivery speed:
According to the Finance Online report, 63% of the businesses choose SaaS products because of their flexibility, while 58% of the businesses choose as it allows business continuity.
Microsoft is the largest SaaS provider worldwide.
Microsoft has a revenue market share of 18%.
Next to that is Salesforce that has a market share of 12% and generates $3.74 billion in revenue.
This was followed by Adobe with 6.7%, Oracle with 4.9%, and SAP with a 4.5% market share.
SaaS churn statistics
- 20% is the annual median churn rate for SaaS businesses that make less than $10 million annually.
- The churn rate is 8.5% more for the companies that generate more than $10 million in revenue.
- 32% of the companies have reported the churn rates of 5%, while the other 32% of the companies have a churn rate of 5-10%.
- 42% of the low growth companies have seen high churn.
- 5% and 7% per year is the average churn rate for the companies.
- 69% of the companies calculate the churn rate based on the number of customers. While 62% measure churn rates by revenue.
SaaS pricing
- 39% of the companies fix the price for the products with a value-based approach.
- 38% of the SaaS companies have “usage-based pricing”.
- On average, SaaS companies spend 6 hours planning their pricing.
- Only a few, 31% of the SaaS companies offer a small discount while 38% are offering an occasional discount of 10-25%.
- A 1% improvement in product pricing can boost profits by 11%.
- Over 54% of SaaS companies are offering annual pricing plans.
- 38% of the SaaS companies have reported that they don’t like to offer free trials or ‘freemium’ options for their products or services.
- 44% of the SaaS companies prefer offering a free trial. Out of these, 41% prefer offering 30 days trial while 18% prefer 14 days free trial.
- Cost with 59% and security with 47% are the two important aspects customers see while buying SaaS apps.
- 46% of the SaaS businesses implemented “per user” pricing strategies on their site.
- Fastly growing SaaS companies are generating 40% more leads per month than those companies with slower growth rates.
- 51% of the large SaaS companies with more than $2.5million in revenue use field sales as their top distribution method. On the other hand, only 8% of large SaaS companies use internet sales strategies.
- SaaS companies that provide free trials without the need for a credit card generate 2x more paid customers.
SaaS spending benchmarks
- It is estimated that the SaaS spending will double by 2020.
- 85% of small businesses have reported implementing SaaS solutions by 2020.
- As per the 2019 Annual SaaS Trends Report, companies are spending $2,884 per employee on SaaS.
- SaaS solution has a 15% contribution to the total enterprise software spending.
Sources:
Conclusion
By looking at these SaaS statistics you would have certainly come to know how fast the SaaS is growing.
Almost all the companies are using SaaS in their day to day businesses.
As a business owner, you need to keep these SaaS statistics in mind, before taking any long-term software developmental works in your organization.
I hope you have found this post on SaaS statistics helpful.
