What is the meaning of SaaS Application Development?

There are many different software distribution models in 2024. One of the most popular models for software development is known as SaaS Application Development. The easiest way to explain SaaS Application development is that a company builds a cloud platform for a specific service they wish to offer, and offers it to users for a monthly or yearly subscription. 

But to understand SaaS application development, first we need to know what SaaS means. SaaS simply means Software as a Service. When a software is built to provide a specific service to its users, it can be termed as a SaaS product. 

At the end of the day, any product you see online, if it is offered for a subscription, you’re probably looking at a SaaS Application. And the industry is growing rapidly. The SaaS application development is expected to grow by $200 billion in 2024, according to a report from McKinsey and Co. 

Here are some quick statistics related to SaaS application development based on an article on Spendesk about SaaS application development industry. 

• The SaaS industry is worth more than $195 billion. (Gartner)
• It’s estimated that by 2025, 85% of business apps will be SaaS-based. (Bettercloud)
• By 2026, public cloud spending is predicted to exceed 45% of all enterprise IT spending. (Gartner)
• Marketing and sales remain the highest expenses of SaaS companies, amounting to 50% or more of their revenues. (McKinsey)
• End-users will have spent more than $438k on SaaS subscriptions since 2020. (Gartner)
• There are approximately 30,000 SaaS companies worldwide in 2023. Almost 15,000 of those are in the marketing sector. (Ascendix)
• The US has nearly 17,000 SaaS companies and 59 million customers worldwide. (Statista)
• The UK follows the US with 2,000 SaaS companies and 3 billion customers worldwide. (Statista)
• Private SaaS funding in Europe is seeing 3.2x year over year growth. (Paddle)
• Investments in Indian SaaS companies increased to $4.5 billion in 2021, a 170% increase over 2020. (Economic Times)
• The SaaS industries in China, India, and Brazil are expected to grow by over 2x between 2020 and 2025. (Reply)
• Germany is expected to experience the largest increase in SaaS market growth from major markets by 2025, from €6.85 billion to €16.3 billion. (Statista)
• In 2021, there were more than 337 SaaS unicorns and 15 decacorns (valued at more than $10 billion USD) in the US. (SaaS)
• As of April 2023, Salesforce is the largest SaaS company in terms of market cap, followed by Adobe, and Intuit. (Mike Sonders)
• On G2, the top 3 rated SaaS apps for “Best Software Products 2023” are Zendesk, Freshping by Freshworks, and Hubspot Marketing Hub, respectively. (G2)
• In 2020, the top 15 SaaS companies had a $1.4 trillion market cap and $80 billion in revenue. (Tech Times)

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