Market insights

The Booming Market of SaaS and What Can We Expect

Mar 18, 2025 4 minutes read
Mar 18, 2025 4 minutes read

Rapid technology advances, growing cloud adoption, and innovative business models such as superapps are the main drivers of the industry’s growth.

It only took 20 years for the Software as a Service solution to become as popular as traditional software, and it may require even less time for it to become the preferred choice for many organizations.

The SaaS market is growing incredibly quickly, achieving a value of about US$266 billion in 2024, with a predicted expansion of roughly 20% per year, soaring to nearly $1.1 trillion by 2032, according to Fortune Business Insights.

Rapid technology advances, growing cloud adoption, and innovative business models such as superapps are the main drivers of the industry’s growth.

However, SaaS market players also face significant obstacles in the form of rising adoption costs and threats to the existing traditional SaaS models from the evolution of artificial intelligence (AI).

What are the latest trends in the industry, and what should SaaS market players expect in the near future? We explore these topics in our latest ENC article.

What is SaaS?

In a nutshell, Software as a Service – SaaS – also called web-based software or hosted software, allows users to use applications remotely via the internet rather than downloading and installing software locally on office computers or other hardware.

image

Major trends in the SaaS market

Trend #1. Continuous growth

A study by Fortune Business Insights revealed that by 2023, nearly 73% of organizations had already begun using SaaS apps in their operations, with this shift largely due to the apps being affordable, easily scalable, and suitable for remote work environments.

The same study posits that the impressive growth of the SaaS market is expected to be further driven by the extensive use of cloud-based solutions and data-driven decision-making:

  1. Integration with complementary tools: Improved functionality and user experience are achieved through smooth connectivity between various software programs.
  2. The use of cloud-based solutions: Since companies are in search of cost savings, scalability, and flexibility, public and hybrid cloud solutions continue to grow in popularity.
  3. Data-driven decision-making: Businesses trying to use data to gain a competitive edge now rely on centralized analytics, which is the process of compiling data from several sources, including operations, sales, and customer contacts, into a single, centralized repository to enable comprehensive analysis.

Trend #2. Integration of AI and automation

Artificial intelligence will continue to revolutionize the SaaS sector and will mainly be driven by these benefits:

  1. Increased efficiency in performing various operations: Around 30% of coding activities are being automated by AI although companies are not yet prepared to let AI write more code due to legal and risk considerations, explained Forbes.
  2. A new level of personalization: Organizations are now able to provide highly customized user experiences, from tailored dashboards to individualized customer care. One example of this is GitHub Copilot which is an automatic programming instrument created by GitHub and OpenAI.
  3. Continuous adoption of AI: Up to 75% of SaaS companies will integrate AI-driven automation into key business operations in the next couple of years according to industry analysts.

However, opportunities aside, the use of AI in the SaaS industry also brings certain challenges.

In particular, AI's wide adoption across companies is shaking up and even replacing the purposes of the standard software apps. The set of existing SaaS systems may face further disruptions as more and more firms adopt AI game-changing technology.

These threats exist even for SaaS providers, such as Workday, which has announced plans to cut its workforce by 8.5% (1,750 people) due to increased demand for AI.

Trend #3. Rise of micro SaaS and various cloud models

What is micro Saas?

Small, specialized SaaS companies that serve particular industries or address particular issues are referred to as micro SaaS.

Micro SaaS ventures use automation to maintain low operating costs, and, due to their agility, they are able to offer individualized, high-touch service, which is essential to retain and satisfy customers.

In 2024, many companies, especially those in the Banking, Financial Services, and Insurance (BFSI) sector, decided to make use of public cloud infrastructures.

At the same time, the hybrid approach (i.e., public cloud services + on-premise infrastructure*) is also predicted to grow at a faster pace.

*On-premise infrastructure refers to computing resources, such as servers, storage systems, and networking equipment, that a company physically hosts and administers within its own facilities.

image

Trend #4. More attention to security within the SaaS ecosystem

SaaS ecosystems face certain security vulnerabilities, and for the most part, these are the result of complex internal set-ups within organizations, which leads to inconsistency because numerous departments handle their own security settings.

Another aspect is data sensitivity, as important business data and personal information are located on the same SaaS platform.

Trend #5. Growing number of SaaS superapps

SaaS superapps are becoming more and more popular because they give end users a set of essential functionalities and the freedom to independently work on their mini-apps.

What are superapps?

SaaS superapps bundle many features into one easy-to-use platform, simplifying the user’s daily tasks by bringing all the tools they need into one place while also offering a personalized experience.

Companies can also boost their earnings through options such as in-app ads and premium services.

image

The trend, which was first popular in consumer markets, is anticipated to pick up more pace in the B2B landscape as it unifies multiple application programming interfaces (APIs) into a "One API for all" solution.

Companies known for their superapps include:

  1. WeChat (country: China, users: over 1 billion) is used for messaging, social media, e-commerce, and mobile payments.
  2. Gojek (country: Indonesia, users: over 150 million people) is used for ride-hailing, food delivery, and mobile payments.
  3. Paytm (country: India, users: over 350 million) is used for mobile payments, online shopping, and bill payments.

Final word

SaaS is expected to remain at the cutting edge of the digital revolution, providing businesses continue to place a high value on flexibility, efficiency, and customization.

The trends discussed in this article point to a future in which software delivery will be safer, more flexible, and able to adapt to the changing demands of organizations all around the world.

More insights

Navigating the Expert Network Landscape: Survival Strategies for New Entrants Navigating the Expert Network Landscape: Survival Strategies for New Entrants
4 minutes read
The Booming Market of SaaS and What Can We Expect The Booming Market of SaaS and What Can We Expect
4 minutes read
When and Why Should Startups Work With Expert Networks? When and Why Should Startups Work With Expert Networks?
4 minutes read
How Companies Can Navigate Energy Markets Using Expert Networks How Companies Can Navigate Energy Markets Using Expert Networks
4 minutes read

Subscribe and never miss a publication

Stay connected to industry news.

Please enter email
Please enter a valid email
allow cookies

Allow cookies

We use cookies to ensure that we give you the best experience on our website. Learn more.