SaaS is a cloud-based model that delivers applications that are managed by the service providers. SaaS products require minimal maintenance and administration vis-a-vis in-house deployments, which makes them increasingly popular.
SaaS (Software-as-a-Service) is not so much a product category or an industry as a business model. SaaS companies charge clients a per user per month fee which translates into loyal subscribers and recurring revenue.
Given the competition in the industry, only the very best SaaS companies can stand out. In this article, we explain what a SaaS product is and which are the top 10 SaaS companies in 2019.
What is a SaaS product?
With advances in cloud computing, many companies are able to use SaaS products. SaaS or Software-as-a-Service products are those in which customers use applications that are hosted by a third-party provider.
The software is then made available for customers over the internet, without the need for an office server.
The best part about SaaS applications is that they are multi-faceted. Customers can integrate these applications with other software using open APIs and thereby expand the scope and application of the product. This also allows them to customize products based on their needs.
Over time, SaaS applications have expanded across functions, business processes, and departments.
SaaS applications are available for financial management, Human Resource Management (HRM), billing, sales management, collaboration, and productivity.
Top 10 SaaS Companies
Here’s our pick of the top SaaS companies in 2019; this list is based on both current scale and future potential.
Surprised to find Google at the top of this list? Google’s G Suite is one of the most successful SaaS products in the market today.
G Suite has a whole host of apps, most of which we are familiar with and use every day. These include Gmail for email service, Drive for cloud storage, Calendar for appointments and time management, and Docs, Sheets and Slides for creating documents.
While Google has millions of users who use these services for free, it also has a large number of businesses who pay for the premium service which includes features like 24/7 phone support and unlimited cloud storage.
Google’s G suite has revenues of more than $1 billion per quarter, which makes it one of the most valuable SaaS companies in the world.
Oracle is one of the world’s leading software-as-a-service providers. It provides a range of cloud-based applications that bring more than $6 billion in revenue.
Oracle specializes in enterprise software as well as computer hardware products and services. Some of Oracle’s most popular enterprise software includes Oracle ERP Cloud, Oracle Fusion Applications, and Oracle CRM on Demand.
Oracle Fusion is their flagship product as it combines CRM and Financial Services with Oracle’s Sales Cloud. Oracle has the unique distinction of having all the Fortune 100 companies as customers. They also have more than 420000 customers in all.
SAP is another massive SaaS company that serves more than 183,000 customers in over 130 countries.
Although SAP has been around for decades, they’ve been able to update their offerings by building cloud-based SaaS solutions.
SAP’s flagship SaaS product is the SAP Business ByDesign which is a complete integrated enterprise software — it facilitates departments ranging from finance, procurement and sales to Human Resources, customer service, and supply chain.
The product is also industry agnostic and works across manufacturing, wholesale distribution, and professional services.
HANA is another SaaS tool from SAP which is great for advanced analytics. SAP’s investor report projected revenues of 5 billion euros from their cloud business in 2018.
Adobe started off as a software licensing business and has managed to become a cloud-based SaaS business over the years.
Adobe Creative Cloud is their flagship product and has a set of cloud applications for various creative pursuits like web design, photography, graphic design, video editing, and so on.
Millions of individuals and organizations pay subscription fees for Adobe products like InDesign, Illustrator, Photoshop, After Effect, and Premiere.
In fact, Creative Cloud brings in more than $5 billion in ARR (Annual Recurring Revenue) for Adobe. Adobe counts many Fortune 50 companies among its clients.
Microsoft is another large SaaS company; in fact, it is the world’s largest enterprise SaaS solutions provider.
It has a number of cloud-based enterprise solutions from Azure with Office 365 to Dynamics. Microsoft 365 is their flagship product, combining Office 365 with Windows 10, and enterprise mobility and security.
It brings $26.7 billion in revenue each year. Office 365 has 135 million business users while 200 million business devices use Windows 10.
Salesforce had annual revenues of $10.54 billion in 2018. Salesforce is a pioneer in the cloud-based solutions domain and has been selling cloud-based CRM (Customer Relationship Management) software for close to two decades.
Sales Cloud is their flagship product which helps companies manage their sales pipeline. Despite the entry of other SaaS giants like SAP and Oracle, as well as several startups, Salesforce has managed to retain significant market share in the CRM software domain.
Apart from CRM software, Salesforce also sells social networking applications for internal development as well as acquisitions.
While most companies on this list focus on large enterprises, Intuit designs solutions for small to mid-sized businesses.
Its two flagship products QuickBooks and TurboTax help over 42 million customers with their financial requirements — from payroll to accounting to personal finance.
Intuit earned revenues of $5.96 billion in 2018. It completely dominates the financial management domain and has very few competitors that have managed to gain a foothold in this segment, especially when it comes to SMBs(Small and Medium Businesses).
Dropbox is a relatively newer entrant compared to some of the behemoths on this list. It focusses on providing online storage for individuals and businesses.
It enables people to share and manage files across devices. Several features can be used for free but there is a premium version which has more storage and some custom features.
While the platform has more than 500 million registered users, 12.3 million of them are paying customers.
It recently went public in March 2018 and raised a whopping $756 million through its IPO.
Splunk has become the leading security and operational intelligence platform across the world. It turns Big Data into intelligible, visual information in the form of graphs, reports, dashboards, and alerts.
More than 85 of the Fortune 100 companies use Splunk and it boasts of $1.271 billion revenue in 2018.
Not only does it earn through adding new customers but also by upselling to existing customers who expand their use of the platform through its analytics and machine learning features.
Shopify is a platform that provides a storefront, shopping cart, and hosting for more than 600,000 businesses.
The company has a dual business model; they earn from subscription fees as well as from processing transactions.
Their total revenue in 2018 was $1.073 billion, a 59% increase over 2017. This makes them the fastest SaaS company to reach the $1 billion revenue mark.
SaaS has established itself as one of the most profitable business models in the world. Many software companies, even those in this list, have had to move from an in-house deployment or software license model to a cloud-based SaaS system.
While most of the names in the list of the top SaaS companies are tech giants who have been around for some time, there is a lot of scope for younger SaaS startups too, especially if their technology disrupts a particular niche.
This list should give you an idea of the overall scope of the industry and the companies who dominate it.
Which SaaS companies according to you have revolutionized the software industry. We would love to know in the comments...