ResearchAndMarkets.com has released the “Software as a service (SaaS) Global Market Report 2020-30: COVID-19 Impact and Recovery” report.
ResearchAndMarkets.com has released the “Software as a service (SaaS) Global Market Report 2020-30: COVID-19 Impact and Recovery” report. Major players in the Software as a Service (SaaS) market are Salesforce, ServiceNow, Microsoft, Google and Cisco.
The global software as a service (saas) market is expected to grow from US$192.1bn in 2019 to $194bn in 2020 at a compound annual growth rate (CAGR) of 1%.The low growth is mainly due to economic slowdown across countries due to the COVID-19 outbreak and its measures. However, the market is then expected to recover and grow at a CAGR of 10% from 2021 and reach $253bn in 2023.
The Software as a Service (SaaS) market consists of sales of cloud-based software services. SaaS is a software solution that can be purchased on a subscription or pay per use basis to use an application for organisational purposes and customers can access this application over the internet, mainly through a web browser.
All the applications data and software are located in the services provider’s data centre. SaaS allows an organisation to run an application at minimal upfront cost and speeds up the overall functionality of the organisation.
The north American market is the largest market for software as a service and is expected to continue to be the largest market during the forecast period. Increasing threats on data security, especially on cloud platforms, are expected to limit the growth of companies in the software as a service market during the forecast period.
The threats to data security include industrial espionage and hacking, which resulted in multiple breaches of data security involving public cloud environments. These breaches are mainly because of the negligence of the cloud service providers. In addition, many companies lack trust in data security when outsourcing from a third party vendor.
As vendors have access to the organisation’s data, companies fear the misuse of data, which might affect the organisation’s reputation. For example, Code Spaces, a former SaaS provider, discontinued its operations as hackers had access to their cloud services and stole all their data, due to which Code Spaces faced damages in its reputation, finances and business.
The introduction of artificial intelligence is gaining popularity in the SaaS market. Artificial Intelligence (AI) is an area of computer science that focuses on the simulation of human intelligence processes by machines. AI in SaaS helps companies to upgrade themselves from time to time with the latest data, create a better user experience through predictive analytics, automate the areas where manual functions were required previously and personalise user interface features.
Rapid changes in business dynamics in the market are expected to benefit the software as a service (SaaS) market in the forecast period as cloud-based solutions support business operations in changing conditions. Dynamic market conditions include economic uncertainty, competitive rivalry, increasing mobile adoption, changing regulations, internet usage, and applications.
These conditions, along with the increasing number of infrastructures and established networks, have forced organisations to pursue scalable and flexible solutions such as SaaS and other cloud-enabled services to run and supervise their operations cost-effectively and efficiently.
These factors have also compelled companies to outsource applications and prefer cloud computing services like SaaS to reduce their cost burden on infrastructure. In addition, companies that seek services from a third-party vendor are more likely to get better performance, compliance and customer satisfaction at a low cost.
For example, Sony Communications aims at delivering innovative products and better experiences to its customers using automation and Infosys SaaS solutions. Infosys helped Sony attain customer loyalty and win the competition by providing robust IT solutions and design thinking at a low cost, which helped Sony have a competitive edge.
The General Data Protection Regulation (GDPR) break the split of regulations for the security of personal data in the European Union. It makes provisions to protect the personal data and privacy of EU citizens for transactions that happen within EU member states. It also regulates the export of personal data outside the EU.
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There could be data subjects that patronise the subscriber that is located in the EU, even if a single SaaS subscriber is based in a non-EU location and the SaaS application is based in a non-EU location. This may cause the subscriber to follow the GDPR.