SaaS market opportunity...and competitive landscape

Curious to know how much money you can make with your SaaS business, which markets are more likely to pay you and how likely you are to get funding? You've come to the right place. No, we are not a fortuneteller, but we can definitely tell you some interesting things about market size, opportunities and threats. 

How much revenue can your SaaS business gain?

The total revenue to be gained by all SaaS businesses in the world in 2015 is estimated by Gartner at approx. $22B. The market has almost doubled in the last 4 years and will continue to grow at approx 20% per year until 2020.

On the other hand, competition is quite fierce: lots of Davids fighting Goliaths like Oracle, Salesforce and Netsuite, while also fighting between Davids themselves for the SMB market.

So if you dream to become the multi-billion dollar company, set your expectations right. If you are starting today, say it will take you about 5 years to reach that level, while the market will most probably double again to $50B. Which means you are aiming for at least a 2% market share. Challenging!

Which markets are more likely to pay for using your SaaS?

Different markets have different affinities for SaaS, and if you are wondering which markets should be in your focus do look at the SaaS adoption by region.

North America is a must as it has and always had the highest adoption of SaaS: 63% of the worldwide SaaS revenue in 2012 ($9.1B out of $14.5B), according to Gartner

Western Europe is also an attractive market, that generated 22% of the global SaaS revenue in 2012 ($3.2B out of $14.5B). 

Asia is the third global market in terms of revenues generated for SaaS, with 6% share of the global SaaS revenue in 2012 ($1B out of $14.5B). It is said that the region is rapidly growing and that there is a perfect storm brewing for SaaS startups in Asia.  

How likely are you to get funding?

According to Compass’ State of SaaS 2014, very likely. Their research shows that 72% of SaaS startups are funded, 19% with more than $1M.