The global public cloud software-as-a-service (SaaS) market is forecast to reach 105 billion dollars this year. The market has more than tripled since 2015 and is predicted to grow to over USD 140 billion by 2022.
According to data from Blissfully, which tracks SaaS application usage and spending for about a thousand brands, SaaS spending has increased across all company size segments since 2015, with small and mid-market companies showing particularly robust spending growth.
Another survey from Techaisle illustrates striking trends. According to a 2020 US SMB & Mid-market SaaS Adoption survey of 1515 SMBs, US SMB SaaS adoption went from widespread to ubiquitous from 2015-2019.
In 2015, only 62% of all US small businesses (1-99 employees) were using SaaS. By 2019, small business SaaS use was up 29% to 80%.
US-based mid-market companies, those with 100-999 employees, also had a significant increase in SaaS adoption. In 2015, 83% were using SaaS. By 2019, this figure reached 98%.
SMEs race to digitise
Small and medium-sized enterprises (SMEs) make up over 90% of global enterprises and play a pivotal role in job creation and social welfare. According to
The World Bank, SMEs represent about 90% of businesses and more than 50% of employment worldwide. There are 30 million small businesses in the US alone that account for around 99% of all companies.
As surveys show, an increasing number of this vast segment of businesses are spending more on SaaS solutions. This can be primarily attributed to the need for these businesses to digitally transform and stay competitive in a rapidly digitising and uncertain global business environment.
This need has intensified due to coronavirus lockdowns, forcing tens of millions of SMEs to close their doors and move online to continue operations.
Regardless of the coronavirus's accelerating impact, which is unlikely to last, the movement to the digital world is profound and unstoppable.
Technology is seeping everywhere and permeating every industry.
Everything is becoming technologised to such an extent that the gap between high-tech and low-tech businesses is quickly disappearing.
With almost no exception, businesses' ability to compete, scale, add value, and create new products and services now and into the future will depend on technological know-how and capabilities.
The problem for SMEs is they typically lack the capabilities and financial resources required to digitise their operations.
They can't invest in expensive IT infrastructures or hire IT professionals in-house. Instead, they need easy to use, flexible, low maintenance and low or no code software services and systems that reduce operational costs and let them focus on growing their core business.
Unlike large enterprises, SMEs also have less complex IT needs, security concerns, and fewer legacy applications, which means they are generally more comfortable handing over delivery and operation to third-party SaaS providers.
SaaS solutions are simply the right fit for SMEs who must digitally transform their operations but need scalable and flexible solutions that are cost-effective and efficient.
For all these reasons, it's easy to see why cloud-based SaaS solutions have become the software deployment method of choice for an increasing number of SMEs and why they will continue to do so in the foreseeable future.
Anthony is the Chief Content Officer at Intrepid, a global marketplace community to buy and sell professional technology and creative services.
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