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Saudi Arabia's economy is heavily dependent on crude oil earnings. Therefore, to diversify the country’s economy, the government has put special emphasis on strengthening the IT infrastructure and has recently launched initiatives such as “Saudi Vision 2030”. These proposed plans aim to change the overall SaaS market outlook and revenue mix by focusing to stimulate the non-oil sector growth by improving the infrastructure of the country which includes encouraging investments in disruptive IT solutions, digital transformation, entertainment hubs, advanced healthcare institutes, etc. Also, to engage in the global IT evolution and digitalization, the country is planning to upgrade its IT infrastructure by cloud integration, deployment of advanced IT solutions such as artificial intelligence, etc.
Cloud adoption in the form of Platform as a Service (PaaS), Infrastructure as a Service (IaaS), and Software as a Service (SaaS), is on the rise from banking and financial institutions, oil and gas giants, government establishments, etc.
The Information and Communication Technology (ICT) spending in the country increased by 2.4% over 2019, and the market size is set to exceed USD 37 billion in 2020. Out of that, the market size of the software is expected to be around USD 1.4 billion. Moreover, the growing market trends such as the business expansion of tech giants such as Google, Amazon in the country by opening new data centers would contribute to market growth.
According to MarkNtel Advisors’ research report titled “Saudi Arabia Software as a Service (SaaS) Market Analysis, 2020”, the Saudi Software as a Service market is anticipated to grow at a CAGR of around 18% during 2020-25. The market is forecast to grow on an account of the expansion of the e-commerce industry and digitalization in oil and gas upstream and midstream. According to the MarkNtel Customer Survey, around 73% of the organizations have not deployed a cloud in any form in their operations in the country (as of March 2020). These organizations would be on the radar of SaaS service providers during 2020-30 to expand their footprints.
Also, the investments in smart grids in the country have been proliferating the expansion of Software as a Service. Moreover, automation of business operations in chemical plants and other manufacturing and assembling units are further catalyzing the deployment of Software as a Service (SaaS) market.
Public Cloud had the highest market share in 2019 owing to its relatively lower cost. However, the private cloud market segment is exhibiting exponential growth due to its rising deployment in the banking and financial services market. Banks and Insurance companies are also opting for a hybrid cloud deployment. Among the three categories, the hybrid cloud’s growth rate is expected to outperform private and public cloud deployments during 2020-25. The market share of the hybrid cloud is expected to undergo a considerable rise during the forecast period. However, the market share of private cloud is also forecast to rise in the Software as a Service market in the country due to features such as single-tenant architecture, on-premise hardware, direct control of underlying cloud infrastructure. These features are supporting organizations, especially banks to maintain security and provide the ability to choose resources.
In 2019, around the banking and financial services industry had a market share of around 40% to 50% in the country’s Software as a Service market.
End-User Traction Toward ERP, HRM, and CRM to Emerge as Market Opportunities
The end-users in the country have been actively opting for Software as a Service is driving the Enterprise resource planning (ERP) segment during 2020-25. Therefore, ERP’s market share in the Saudi Arabia Software as a Service market was mostly around 45% to 50% in 2019. Human resource management and Customer relationship management would be the key hotspots for the service providers through 2025. The HRM segment acquired a considerable market share in the industry and is forecast to grow at a significant pace and add more market value in the industry. The human resources department plays an important role in improving the performance and productivity of a particular company. This department performs various functions ranging from managerial to operating functions and thereby serves as the pillar of the organization. Managing human resources is a continuous process, and for this, the companies have started preferring Software as a Service model in Saudi Arabia. Therefore, it is expected that the share of human resource management is expected to rise in the years to come.
Investment by the Market Players to Intensify Competition
The key market players in the industry are Microsoft, SAP, Oracle, Cisco, Salesforce, Amazon, IBM, VMware, etc. The companies are investing in data centers that are contributing to the market growth of the SaaS in the country.
Key Questions Answered in the in the Market Research Report
Market Outlook, Segmentation and Statistics
Frequently Asked Questions
Q. What is the historical year, base year and forecast year considered in the research report on Saudi Arabia Software as a Service (SaaS) Market?
A. The historical data has been provided since 2015, while the base year is 2019 and the data is forecast up-to 2025.
Q. What are the units or denomination for measuring market value in the report?
A. The market size/industry size or the market value is measured in terms of USD Million.
Q. What would be the growth rate or CAGR of Saudi Arabia Software as a Service (SaaS) Market during 2020-25?
A. The growth rate of Saudi Arabia Software as a Service (SaaS) Market during 2020-25 is forecast to be around 18%.
Q. Who are the key competitors or players operating in Saudi Arabia Software as a Service (SaaS) Market?
A. Microsoft, SAP, Oracle, Cisco, Salesforce, Amazon, IBM, VMware are few of the leading players in the Saudi Arabian Software as a Service Market.
Q. Which Application segment would emerge as an opportunity area for players in Saudi Arabia Software as a Service (SaaS) Market?
A. The CRM and HRM application of the Saudi Arabia Software as a Service is expected to attain the highest CAGR during the forecast period and their market share is expected to surge during the forecast period.
Q. Which type of deployment would emerge as an opportunity area for players Saudi Arabia Software as a Service Market?
A. The public cloud segment grabbed a significant market share continue to grow at a highest CAGR, on account of features such as inexpensive, ease of use and rising private investments.
