How Many SaaS Companies Are There? (2022)

by Josh Howarth - May 20, 2022

As one of the three primary tiers of cloud computing, Software as a Service (SaaS) is very much on the rise.

Numerous companies have ridden the SaaS wave, going from strength to strength off the back of the growing industry.

With that in mind, here’s a breakdown of what we’ll cover:

SaaS Company Stats 2022 (Top Picks)

  • There are currently approximately 25,000 SaaS companies.
  • Globally, there are about 14 billion SaaS customers.
  • The US has the largest proportion of SaaS companies (around 60%).
  • Salesforce has the largest SaaS market share at just under 10%.
  • The SaaS market is predicted to reach a valuation of $307 billion by 2026.

Number of SaaS Companies in 2022

The latest data suggests that approximately 25,000 SaaS companies exist worldwide.

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The lion’s share (15,000) of these SaaS companies are based in the United States.

The United Kingdom is a distant second with approximately 2,000 SaaS companies.

Canada (1,000), Germany (1,000), and France (939) round off the rest of the top five.

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In total, there are around 14 billion SaaS customers worldwide.

Here’s a full breakdown of the top SaaS-producing countries:

Rank Country SaaS Companies
#1 United States 15,000
#2 United Kingdom 2,000
#3 Canada 1,000
#4 Germany 1,000
#5 France 939
#6 India 813
#7 China 663
#8 Brazil 567
#9 Australia 543
#10 Spain 472
#11 Israel 378
#12 Netherlands 340
#13 Singapore 261
#14 Sweden 252
#15 Ireland 241

Within those 25,000 or so SaaS companies, an estimated 337 are classified as unicorns. And around 15 of those are decacorns.

The number of SaaS startups launched increased year-over-year from the early 2000s to the mid-2010s. These numbers have dipped in recent years but look to be on the rise once more.

New SaaS Startups Launched By Year

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Here’s the latest data on SaaS startups founded each year since 1998:

Year No. of SaaS Startups Founded Change Over Previous Year Change Over Previous Year (%)
1998 84 - -
1999 199 ↑ 115 ↑ 136.9%
2000 177 ↓ 22 ↓ 11.1%
2001 191 ↑ 14 ↑ 7.9%
2002 156 ↓ 35 ↓ 18.3%
2003 151 ↓ 5 ↓ 3.2%
2004 192 ↑ 41 ↑ 27.2%
2005 221 ↑ 29 ↑ 15.1%
2006 294 ↑ 73 ↑ 33%
2007 375 ↑ 81 ↑ 27.6%
2008 460 ↑ 85 ↑ 22.7%
2009 542 ↑ 82 ↑ 17.8%
2010 689 ↑ 147 ↑ 27.1%
2011 832 ↑ 143 ↑ 20.8%
2012 1083 ↑ 251 ↑ 30.2%
2013 1197 ↑ 114 ↑ 10.5%
2014 1247 ↑ 50 ↑ 4.2%
2015 1469 ↑ 222 ↑ 17.8%
2016 1308 ↓ 161 ↓ 11%
2017 1460 ↑ 152 ↑ 11.6%
2018 1196 ↓ 264 ↓ 18.1%
2019 674 ↓ 522 ↓ 43.6%
2020 114 ↓ 560 ↓ 83.1%
2021 302 ↑ 188 ↑ 164.9%

The drop-off in SaaS startups being launched could be a result of incomplete recent data, further exacerbated by the effects of the pandemic. However, despite this decline, the industry is expected to continue its overall ascension.

Source: The Latka Agency, SaaStr, Crunchbase, CardConnect

Global SaaS Revenue

Over the last decade, the cloud application market has grown year over year.

In 2013, the market was worth an estimated $30.4 billion. And by 2017 this figure had almost tripled to $86.3 billion.

As of 2022, the cloud application market is valued at approximately $146.6 billion. And is set to hit $168.6 billion by 2025.

Similarly, the SaaS market has followed suit, growing in value year-over-year.

Back in 2008, the SaaS market was worth just over $5 billion. However, by 2020, the market had grown by over 28x to $157 billion.

Unsurprisingly, as the SaaS market has grown, so too has end-user spending.

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In less than 10 years, global spending has increased by over 5x to approximately $176.62 billion.

Here’s a full breakdown of worldwide SaaS end-user spending figures since 2015:

Year End-User Spending Increase Over Previous Year Increase Over Previous Year (%)
2015 $31.4 billion - -
2016 $48.2 billion ↑ $16.8 billion ↑ 53.5%
2017 $58.8 billion ↑ $10.6 billion ↑ 21.99%
2018 $85.7 billion ↑ $26.9 billion ↑ 45.75%
2019 $102.1 billion ↑ $16.4 billion ↑ 19.14%
2020 $120.7 billion ↑ $18.6 billion ↑ 18.22%
2021 $152.18 billion ↑ $31.48 billion ↑ 26.08%
2022* $176.62 billion ↑ $24.34 billion ↑ 16.06%
2023* $208.1 billion ↑ $31.48 billion ↑ 17.82%

*Projected figures

Source: Apps Run The World, Forbes, Gartner

SaaS Companies by Region

More than half (approximately 60%) of all SaaS companies are based in the US. Given that Canada has a further 1,000 SaaS companies, it’s no surprise that North America dominates the market.

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Three of the top five countries by SaaS companies are European, with a further four of the top 15 also located in Europe.

Africa is the only inhabited continent not to feature a nation within the top 15 SaaS producers.

Here’s a closer look at SaaS companies by region:

Rank Region SaaS Companies* Approximate Market Share
#1 North America 16,000 65%
#2 Europe 5,244 21%
#3 Asia 2,115 9%
#4 South America 567 2%
#5 Oceania 543 2%

*Only includes countries inside the top 15

In 2020, the SaaS market was worth an estimated €107.5 billion ($113.8 billion).

The US was responsible for €92 billion ($97.4 billion).

While the UK contributed €7.5 billion ($7.9 billion).

By comparison, all other software sectors were worth approximately €174.4 billion ($184.7 billion). As a result, the SaaS market equated to 38.12% of the overall software industry.

By 2025, the SaaS market is expected to reach a valuation of €229.5 billion ($242.9 billion) - an increase of 113.49%.

Despite losing some market share, the US SaaS sector is expected to more than double, reaching a value of €191 billion ($202.2 billion).

And the UK’s SaaS sector is forecast to almost double to €14.5 billion ($15.4 billion).

China’s SaaS market is predicted to experience the most growth, jumping from €4 billion ($4.2 billion) in 2020 to €13 billion ($13.8 billion) in 2025.

All other software sectors combined are forecast to drop in value to €169 billion ($178.9 billion). This means the SaaS market will equate to 50.8% of the overall software industry.

Source: The Latka Agency, Reply

SaaS Company Market Share

SaaS is currently responsible for around 70% of company software use. This figure is forecast to rise to 85% by 2025.

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No single company dominates the SaaS market. As of 2020, the five largest SaaS companies held a combined market share of approximately 30.5%.

However, each one of those five companies increased its 2020 market share by between 0.3% and 1.5% over the previous year.

Here’s a closer look at each of those five companies:

Salesforce

With a 9.3% market share, Salesforce claims the largest piece of the SaaS pie.

Salesforce revenue has increased year-over-year for over a decade, gaining increasing momentum in recent years.

In 2017, the company generated $8.39 billion. But by 2021 Salesforce’s annual revenue had reached $21.25 billion - an increase of 153.28%.

Microsoft

Multinational tech giant Microsoft has an 8.7% SaaS market share.

Microsoft has increased its annual revenue each year since 2016. The biggest jump came in 2021, up 17.53% from $143.02 in 2020 to $168.09 in 2021.

SAP

German software corporation SAP holds 4.7% of the total SaaS market share.

Between 2009 and 2019 SAP revenue grew annually from $10.67 billion to $27.64 billion - an increase of 159.04%.

After a small dip in 2020, SAP's annual revenue rose back up to $27.84 billion in 2021, fueled largely by an increase in cloud-based revenue ($9.42 billion).

Oracle

Not far behind Sap with a market share of 4% is Oracle.

Unlike the first three companies mentioned, Oracle’s revenue figures have remained largely unchanged over the last decade. During that period, the company’s revenue has remained between $37.12 billion and $40.48 billion.

However, Oracle’s primary sources of revenue have changed.

Up until 2013, the company was largely reliant on cloud & on-premise software, hardware systems, and services. Oracle then made software license updates & product support, new software licenses, and services hardware a focus between 2014 and 2017.

Since then, the corporation has pivoted towards cloud services and license support as the main revenue stream. This is supplemented by a cloud license & on-premise license

Google

Rounding off the top five, Google has a SaaS market share of 3.8%.

Google cloud revenue has skyrocketed since 2017 when annual revenue reached $4.06 billion. This more than doubled to $8.92 billion in 2019. And Google repeated the trick in 2021, with an annual cloud revenue figure of $19.21 billion.

Source: BetterCloud, IDC, Salesforce, Microsoft, SAP, Oracle, Google

SaaS Market Projections and Future Growth

Within IT security, cloud security spending was the segment projected to grow the most in 2021 (41.2%).

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By comparison, data security came a distant second with 17.5%, followed by infrastructure protection with 16.8%.

It is clear that there is a concerted effort to invest in SaaS and the cloud.

A 2020 survey showed that respondents expect cloud vendors in both Europe and the US to increase spending across the board.

Microsoft Azure claimed the most significant percentage of respondents who believe business spending will increase for the cloud computing service (61%).

In total, 21 cloud vendors were included in the survey, yet only three were predicted to see a decrease in business spending.

Here’s a detailed look at the business spend predictions data for cloud vendors:

Cloud Vendor Significant Decrease Slight Decrease Slight Increase Significant Increase Majority?
Microsoft Azure 3% 5% 42% 19% Increase
Microsoft SaaS software 3% 7% 43% 14% Increase
Microsoft licensed software 4% 14% 36% 10% Increase
AWS 3% 6% 35% 19% Increase
Salesforce 2% 7% 30% 8% Increase
Google 3% 6% 23% 8% Increase
ServiceNow 3% 5% 25% 6% Increase
VMware licensed software 5% 13% 27% 4% Increase
VMware SaaS software 3% 9% 21% 5% Increase
VMware cloud 3% 7% 20% 4% Increase
Oracle Saas software 4% 11% 17% 5% Increase
Oracle licensed software 9% 16% 19% 3% Decrease
Oracle infrastructure cloud 4% 9% 16% 4% Increase
SAP SaaS software 3% 7% 18% 6% Increase
SAP licensed software 3% 7% 18% 4% Increase
Adobe SaaS software 3% 7% 17% 4% Increase
Adobe licensed software 3% 11% 18% 3% Increase
IBM cloud 5% 9% 12% 4% Increase
IBM SaaS software 5% 12% 13% 3% Decrease
IBM licensed software 6% 17% 9% 4% Decrease
Workday 3% 4% 10% 5% Increase

The SaaS market is projected to grow at a CAGR of 11.7% between 2020 and 2026, reaching a valuation of $307 billion.

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Source: Gartner, Flexera Software, PRNewswire

Conclusion

The SaaS market is on the rise and the number of SaaS companies in existence is naturally following suit.

As industries and consumers continue to move towards cloud computing, SaaS business spending and revenue are only likely to grow further, encouraging even more companies to prioritize SaaS.

Written By
Josh Howarth
Co-founder of Exploding Topics.
548 Market St. Suite 95149
San Francisco, California
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