Cloud application services (SaaS) to reach $126 billions by the end of 2021

From SmartKarrot
Quote in Market Research

The SaaS industry’s market capitalization in 2020 is approximately $110 Billion and is expecting a growth of 14.5% in the next year. And by the year 2022, it is expected to reach $143 billion. Services that are seeing most adoption by the companies include cloud consulting, implementation, migration, and management.

More SaaS + Software Stats

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

Growing faster has twice as much impact on share price as improving margins

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The median annual unit churn for SAAS companies was 10% in 2016

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

More Market Research Stats

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

Over the past five years, the Global Biotechnology industry has grown by 2.0% to reach revenue of $301bn in 2019.

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.