SaaS market is set to reach $55 billion by 2026


A new study by software selection site Better Buys shows that the shift to SaaS solutions is growing apace, expected to increase from just $8 billion in 2015 to $55 billion by 2026.

It also reveals that more than 1,400 new SaaS companies have sprung up in the last five years, taking a large volume of market share from major competitors like Adobe, Cisco, IBM, and Salesforce, and accounting for 57 percent of the SaaS market.


While SaaS is growing globally, the US still has more than half the market. Based on recent job listing data from Indeed, top states for growth and job opportunities include Massachusetts, Maryland, Washington, Virginia, and Colorado. This is in contrast to recent tech booms which have been focused on the west coast.

Analysts are the most in-demand position requiring knowledge of SaaS -- followed by administrative assistants and project managers. This growth has also driven wages in the sector higher, with salaries for engineers in some SaaS categories including SAP and Salesforce now averaging six figures.

"SaaS solutions offer significant benefits over on-premise products including cost, accessibility and scalability. SaaS contracts are frequently month-to-month so customers aren’t locked into long-term deals. This means vendors must continually deliver value to minimize flight risk," says Stacia Mullaney of Better Buys. "The surge in startups has taken a large volume of market share from major competitors like Adobe, Cisco, IBM, and even Salesforce. New SaaS offerings and startups are rising at a rate of more than 1,400 over the last five years among various sectors. Larger organizations like Salesforce will need to learn to pivot and execute faster to keep up. Companies are beginning to look for software that answers needs more specific to an industry rather than utilizing enterprise level SaaS that offer a more 'platform' approach, like Salesforce. With this shift, SaaS companies are seeing interesting changes in the marketplace".

In 2015, the most successful mobile SaaS companies were either industry-specific products targeting workforce mobility or productivity tools. The report's authors see this trend continuing in coming years, as mobile productivity and vertical SaaS development are already dominating venture capital funding.

There is of course a risk, as we saw yesterday with Microsoft, that rapid development can overwhelm customers. Mullaney says, "It's important for SaaS providers to deliver proper onboarding and support to help customers get up to speed. SaaS affords the opportunity to push frequent product updates, but vendors should be cognizant that this can cause frustration for users who are accustomed to a certain workflow. SaaS solutions are putting an increased focused on UX in order to make their solutions intuitive and user-friendly".

You can see much more detail in the full report on the Better Buys website.

Photo credit: Alexander Supertramp / Shutterstock

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