Software As A Service (SaaS) Leads The Global Cloud Services Market
The global cloud services market is segmented by type into infrastructure as a service (IaaS), platform as a service (PaaS), software as a service (SaaS) and business process as a service (BPaaS). Out of these segments, the global software as a service market was the largest in 2018, accounting for 41.4% of the total share. SaaS refers to providing complete applications over the Internet. It is also called web-based software, on-demand software or hosted software. Establishments providing SaaS offer access to their own software and hardware, managing access to the application, its security, availability, and performance. Users only need to think about the usage of the service provided and not about how the service is provided or maintained or how the underlying infrastructure is managed.
The global SaaS market is expected to grow from $134.4 billion in 2018 to $220.2 billion in 2022 at an annual growth rate of over 13%. The market size can be attributed to the high popularity of SaaS among large number of small and mid-sized enterprises due to the software’s ease and convenience in operation.
A global survey within IT companies was conducted by IDG Communications, Inc. (IDG) in 2018. According to the survey, 62% of respondents said that low/no maintenance and spending less time on manual updates is one of the major factors driving the adoption of SaaS. 55% of respondents said that increased productivity and decreased labor time is another major factor. According to the same survey, other factors driving SaaS adoption are prominent access and reliability (53%), and enhanced user experience (53%). Examples of SaaS products include Oracle Corporation’s Oracle ERP Cloud, Oracle SCM Cloud, and Oracle Analytics Cloud, Microsoft Corporation’s Office 365 and G Suite, and Amazon’s Amazon Web Services.
Despite being the smallest segment in 2018, at 9.1% market share, platform as a service is expected to be the fastest growing segment of the global cloud services market during the forecast period 2018-2022, at an annual growth rate of 15.4%. The PaaS market is expected to grow to $52.4 billion in 2022. PaaS refers to providing a cloud-based environment that delivers hardware and software tools for application development. Establishments providing PaaS host hardware and software on their own infrastructure. They support the complete lifecycle of application or software development without the need for users to manage the underlying infrastructure. The PaaS market size is mainly restrained by the niche targeting of the market towards software developers.