The market for SaaS (Software-as-a-Service) is expanding at 18,4% p.a. (2016-2020), and is forecast to be worth c. $76 billion worldwide by 2020. There are a large number of small players in this dynamic market, which will continue to fuel market consolidation and M&A activity moving forward. We are seeing both strategic and financial investors aggressively target the sector, which is supporting high (double-digit-plus) EBITDA multiples in the mid-market across Western Europe.
What is SaaS? Software-as-a-Service is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet – it is one of three main categories of cloud computing, alongside Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).
By 2022, 78% of all companies will be running their business applications as SaaS
Major benefits from SaaS solutions include:
- Limited upfront cost compared to legacy systems
- Reduces operational costs
- Scalable and flexible: easy to add and remove users or functionalities
- Remains modern and relevant: easier and faster upgrades
- Improves working processes
- Allows for collaboration in large or decentralized teams
- Easy-to-use: saves time for setup and training
- Provides easy access to valuable data
- Connects easily with third-party apps, and allows customized connections