SaaS statistics: trends, data and insights from $2.5b in processed software spend

As of 2023, it's evident that SaaS companies have continued to thrive. However, the question remains: how great has it been, particularly in light of the rising issue of SaaS waste? Where is the SaaS industry currently positioned, and what is its future direction?

We found these insights by analyzing our customers’ SaaS spending. With over 20,000 deals, 2,500 suppliers, and over $2.3 billion in processed spend, we’ve seen the following trends:

• Total savings achieved by customers through negotiations was $349 million
• Average savings percentage for completed deals was 16.49 percent
• The average ROI for complete retainers was 7.6x, with a total ROI of 8.4x

These SaaS statistics demonstrate the significant potential for cost savings through effective SaaS negotiation and the high ROI of SaaS investments.

Analyzing SaaS trends can provide valuable insights for people considering investing in SaaS. Buyers can understand the industry's status, direction, and potential for cost savings by examining SaaS spending over time. This data can provide benchmarks for what to expect in terms of pricing, deal size, and savings achieved through negotiation.

Additionally, studying SaaS buying statistics can help buyers decide which tools and platforms are most effective for their needs.

Data from other SaaS purchases can help buyers make better decisions, avoid mistakes, and get better outcomes from their SaaS investments. Here’s what we have to share.

Stats on SaaS spending

The average growth rate for annualized spend on SaaS by company size is 58 percent.

The rise in average spending on SaaS products from 2020 to 2022 reflects the expansion of the SaaS market and the increase in SaaS adoption. This growth is mainly due to economic factors, with one contributing factor being the velocity of digital transformation initiatives in response to the COVID-19 pandemic.

As businesses have shifted towards remote work, there has been a higher demand for SaaS solutions that support collaboration, communication, and other business functions in a virtual environment.

In addition, more companies realize the benefits of software-as-a-service products, including greater flexibility and scalability and a reduced need for IT infrastructure and personnel. These factors have led to increased spending on SaaS products in recent years.

Here’s what companies, from small businesses to enterprises, are spending on SaaS and how it has grown since 2020.

Global end-user spending on SaaS to surge by 33 percent from 2021 to 2023

Gartner's Worldwide Public Cloud Services End-User Spending Forecast shows steady growth in end-user spending on SaaS. Global spending on SaaS reached $146 billion in 2021, and they expect it to reach $195 billion in 2023.

Organizations use 130 SaaS solutions -- and it's taking longer to increase their stacks.

According to BetterCloud, the number of SaaS apps organizations use is still high. However, growth has slowed down due to streamlining efforts.

With an increased interest in cutting excess, companies focus more on the elimination of duplicative spending. Forty percent of IT professionals reported streamlining redundant SaaS apps this year, contributing to the higher churn rate.

Even so, the number of SaaS apps increased by 18 percent compared to the previous year. Now, organizations are using an average of 130 apps.

Based on Vendr's data, it is clear that the average time required to close a software sale has witnessed an upward trend in recent years. As of 2022, the average time to close stands at 55.9 days, reflecting a slight increase from the previous year's average of 53.1 days. In 2020, the average time to close was substantially lower, clocking in at 44.1 days.

The significance of time to close cannot be overstated when it comes to purchasing software as a service (SaaS), as it significantly impacts the overall procurement process. A shorter time to close enables organizations to initiate using the software at a quicker pace, thereby leading to enhanced efficiency and productivity. Conversely, a longer time to close could translate into escalated costs and lost opportunities.

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Stats on the top SaaS categories

Vendr's SaaS purchasing report for 2022 has indicated that companies still consider specific software categories critical. These categories include customer relationship management (CRM), security, application performance monitoring (APM), and other revenue categories.

In 2020, only 16.01 percent (66 of 410) of software purchases in the top 10 SaaS categories help generate revenue.

However, in 2022, out of 2087 SaaS deals, 644 (30.85 percent) were linked to revenue generation. This growth indicated that companies became more careful with their IT spending. This year, businesses invested significantly in software solutions supporting sales, security, and revenue efficiency.

Here are the top 20 categories based on the number of completed deals.

• CRM: software that helps manage customer interactions and relationships, often through a centralized database
• Cybersecurity: software solutions that protect businesses and users from unauthorized access, data breaches, and other security threats
• Application Performance Monitoring (APM): tools that monitor the performance and availability of applications and infrastructure
• Project management: software that helps plan, organize, and track project tasks and resources
• Cloud data integration: software that connects and integrates data from disparate hosted software, often for business intelligence and analytics purposes.
• Business intelligence platform: tools that help businesses analyze data and make informed decisions.
• Sales intelligence: software solutions that provide sales teams with insights, data, and artificial intelligence (AI).
• Business communication: software that facilitates communication and collaboration among team members, often across multiple channels and devices.
• Digital analytics: tools that collect and analyze online user behavior and interactions data.
• Sales engagement: SaaS solution that helps sales teams automate and simplify their workflows. It works by integrating with CRM and other real-time sales tools.
• Mobile device management (MDM): solutions that manage and secure mobile devices and applications in the enterprise.
• Single sign-on (SSO): tools that allow users to access multiple applications and systems with a single set of credentials.
• E-signature: software that enables the electronic signing of documents and contracts.
• Applicant tracking system: tools that help recruiters and hiring managers to manage the recruitment process and track applicants.
• Cloud identity and access management: solutions that manage user identities and access to applications and data in the cloud.
• Enterprise resource planning (ERP): software that manages and integrates core business processes such as finance, hr, and supply chain.
• Video conferencing: tools that enable remote team members to communicate and collaborate through video and audio.
• Online whiteboard: software that allows team members to collaborate on visual ideas and diagrams.
• Version control hosting: tools that manage and track changes to code and other digital assets.
• Incident management: solutions that help businesses respond to and resolve incidents and outages.

Stats on the top SaaS apps purchased

SaaS is open for business.

Businesses in various industries are buying new essential tools. We’re seeing a focus on productivity and collaboration software, as well as security and data analytics SaaS platforms.

Here are the top SaaS companies whose products were bought with Vendr in 2022 and what each product offers briefly explained:

• CaptivateIQ - commission tracking and management software
• TripActions - corporate travel and expense management platform
• Gong - sales analytics and enablement tool
• Lattice - employee performance management software
• 6sense - account-based marketing and sales intelligence tool
• Docker Desktop - software development tool for building, sharing, and running containerized applications
• Kandji - Apple device management platform
• Snyk - security platform for managing open-source software
• FloQast - financial close management software
• Greenhouse - recruiting and applicant tracking system
• Okta - identity and access management platform
• Highspot - sales enablement and content management tool
• Crowdstrike - cloud-based endpoint security platform
• Auth0 - identity verification service
• SentinelOne - endpoint protection and response platform
• Fivetran - data pipeline automation platform
• Snowflake - cloud-based data warehousing and analytics platform
• Drift - conversational marketing and sales platform
• Jamf PRO - Apple device management and security solution
• Datadog - monitoring and analytics platform for cloud applications.

Trend alert: indispensable Saas isn’t going anywhere.

Companies don't cut mission-critical SaaS. Yes, it's a harder sales environment. Yes, prospects expect a deal. Yes, budget compression is real. But, companies still need world-class SaaS to operate their businesses.
— Ryan Neu, Vendr CEO

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Stats on the top SaaS apps renewed

Renewing software is crucial to any firm’s technology strategy. Popular SaaS businesses offer vital tools like collaboration and productivity software, customer relationship management, and human resources platforms. These products are being renewed year-over-year.

This shows that the software is valuable to the business, providing a return on investment, and is integrated into daily operations.

Here’s a list of SaaS companies with renewed contracts with Vendr in 2022.

• Slack - popular messaging and collaboration platform
• Salesforce - customer relationship management system
• DocuSign - electronic signature and agreement platform
• Carta - equity management software
• Zoom - video conferencing and communications platform
• Gong - sales analytics and enablement tool
• ZoomInfo Powered by DiscoverOrg - sales intelligence and lead generation tool
• Outreach - sales engagement and automation platform
• Datadog - monitoring and analytics platform for cloud applications
• Fivetran - data pipeline automation platform
• PagerDuty - incident management and response platform
• GitHub - software development collaboration tool
• Okta - identity and access management platform
• LinkedIn Sales Navigator - social selling and lead generation tool
• Zendesk - customer service and support platform
• Segment - customer data platform
• Lucidchart - visual communication and diagramming software
• Lattice - employee performance management software
• Culture Amp - employee feedback and analytics platform
• Greenhouse - recruiting and applicant tracking system

How to use SaaS data to inform your software purchases and management

SaaS companies are continuing to thrive in 2023, despite concerns about SaaS waste. However, with an economic recession, mass tech layoffs, and financial belt-tightening, its the business-critical products that will get purchased and renewed first.

Analyzing SaaS buying trends can provide valuable insights into industry status, direction, and cost savings potential. This can help buyers make informed decisions and achieve better outcomes from their SaaS investments.

Vendr can help businesses find, buy, and manage their software stack by leveraging our knowledge base from over 20,000 software transactions. By using Vendr, businesses can access valuable insights, such as pricing benchmarks, deal size, and savings achieved through negotiation. Together, we’ll work closely to make more informed decisions and achieve better outcomes from your SaaS investments.

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