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SaaS after the surge: what the numbers now suggest

17 October 2024 · 4 min read

Over the last decade, softwareasaservice has gone from an emerging model to the default choice. Global SaaS revenue is estimated at around $247 billion dollars in 2024, with multiple forecasts pointing to continued growth, though at more measured rates than the most optimistic projections of a few years ago.

Some analyst projection expects the market to move on a steep growth axis from roughly $390 billion in 2025 to just over $880 billion in 2030, implying midsingledigit annual growth over that period. For investors and acquirers, the more useful question is not whether SaaS will grow. It almost certainly will. The question is where, and on what terms.

The gap between a working pilot and a scaled deployment is almost always an organisational problem, not a technical one. Three factors account for the majority of failures.

A few patterns stand out in the data and in our own work at Kulas Financial:

01
Regional divergence: North America still holds the largest share of the SaaS market, with estimates in some studies at more than forty percent of global revenue, though growth rates in parts of Asia–Pacific now exceed those in more saturated regions.
02
Category maturity: Horizontal productivity tools and core enterprise systems operate in a very different phase of their cycle than newer vertical applications. Growth rates that once felt normal for broad categories are now more often seen in narrower, specialized niches.
03
Pricing power: As subscription penetration has risen, buyers have become more disciplined. In some segments, unit pricing has come under pressure even as total contract values have held up through expansion into additional modules or services.

One implication is that SaaS exposure is no longer a meaningful description of a portfolio. An investor holding a mix of mature horizontal providers and smaller vertical specialists may have very different risk and return drivers, even though both sit under the same label.

Another implication is that expansion strategies require more nuance. There was a time when moving into an adjacent module or market looked almost riskfree if you had a strong installed base. Today, the cost of adding a new product line can be harder to justify if it distracts from deepening relevance in the areas where your economics are already strong.

We also see a change in the kind of diligence questions being asked. A few years ago, the focus was heavily on net retention, new logo growth, and sales efficiency. Those metrics still matter. Increasingly, clients also want to know:

  • How concentrated is the revenue in a handful of large accounts?
  • How exposed is pricing to procurement exercises that roll multiple tools into a single negotiation?
  • How much of usage is truly embedded in daytoday work, rather than sitting on the edge of user behavior?

The headline growth of SaaS can hide these subtleties. A rising market can make many companies look better than they are. A moderating market reveals which businesses have built something that will endure.

For Kulas Financial, this is where the work becomes more interesting. It is less about forecasting a single market number for 2030 and more about understanding how individual companies sit within that number. The difference between a good and a weak SaaS investment no longer lies in whether the model itself is credible, but in how well the specifics of the business match a market that is still growing but is no longer forgiving of average.