Philippe Botteri from Accel stated that if the current growth continues at this pace, the cloud solutions might overtake on-premises software in value by 2025 and the entire software market should be worth approximately $1 trillion.
SaaS is a subscription-based or pay-per-use model that user can access through online via web-browser. It has a significant lower upfront cost compared to a one-time fee for an on-premises solution, which is a large capital investment and has a lengthy (and often complicated) implementation process. The SaaS model decreases the financial risk as it is paid either monthly, quarterly, or annually and can be cancelled anytime, compared to a one-time fee for traditional software.
SaaS are attractive investments for several reasons:
On the other hand, there are certain risks of investing in SaaS’s:
The second is the danger of big players in the software market, where they can simply buyout the smaller ones or use their near unlimited cash reserves to create a rival SaaS of the smaller companies.
There are certainly ups and downs when it comes to investing in SaaS, with plenty of rewards if the investments are successful, but with risks as well.