The software as a service market in Italy

A SaaS, or "Software As a Service," is a new way of distributing software. A SaaS differs from traditional software in two ways: its ability to be used remotely and its cost. Traditional software is purchased as a tangible product, with the user acquiring final ownership at the time of purchase. A SaaS, on the other hand, is used remotely and has a variable price. It is described as "an application owned, offered and managed by one or more vendors," according to Gartner. This application is built on a set of data codes and definitions that are used on a "one-to-many" basis, with revenue tied to frequency of use or generated on a subscription basis, according to the vendor. Salesforce or SAP are two well-known examples of enterprise software. Accordingly, SaaS is not physical software, but rather virtual software delivered as a service via the cloud.

The global software as a service industry is expected to grow with a compound annual growth rate (CAGR) of 20.8% from $225.6 billion in 2020 to $272.49 billion in 2021. With a CAGR of 12.5%, the market is estimated to reach $436.9 billion in 2025.

The SaaS market has recently exploded in Italy, particularly in response to the needs imposed by the COVID-19 epidemic. From collaboration and document management services to B2C/e-Commerce websites, the sector grew 46% in 2019. Driving this momentum is growth in all categories that enabled businesses to stay up and running during the emergency phase. In the SMB sector, companies adopted Saas, and Cloud Computing services more generally, in their daily work routines in 2020; the percentage share of companies using these services stood at 42% in 2020, up from 30% in 2019. These services have been an efficient solution for forced telecommuting by accelerating the digitization of collaborative processes and flows, which has been largely driven by the consequences of the epidemic. The market is wide open to new entrants and there is a high share yet to be covered.

Today, one of the most important aspects of improving the user experience is simplifying operations. SaaS solutions can evolve based on user feedback and daily use, eliminating the need for time-consuming upgrades or external reinstallations. Companies that continue to use traditional software will eventually find themselves at a significant disadvantage to those that leverage the competitive advantages of SaaS.