For years, the subscription-based SaaS model was the fastest-growing business model for tech entrepreneurs and investors. This growth was especially pronounced from 2012 to 2018, during which subscription businesses grew over 300%, a rate significantly faster than the revenue growth of S&P-500 companies.*
The money being invested in these organizations, peaking in 2021, experienced a dramatic downturn by the end of 2022. VC firms raised their lowest amount in a decade during that year.
This was a ‘delayed’ effect from the pandemic, which caused a brief and dramatic increase in the demand of SaaS products, but then experienced a decline as things went back to ‘normal’ and people didn’t spend that much time in front of their screens anymore.
Despite these fluctuations, the SaaS market has shown resilience. In 2024, it’s estimated to be worth approximately $247 billion, with projections to reach $295 billion by 2025.
The global shift towards cloud-based solutions continues to drive this growth, with an estimated 71% of companies globally relying on SaaS applications, a trend expected to see 85% of all business products being SaaS applications by 2025.
*The S&P 500 includes 500 of the largest publicly traded companies in the United States, chosen based on market capitalization, liquidity, and sector representation.
Cloud and The Subscription Model - A Hot Couple
To understand why Cloud and the subscription model have become so popular, we have to look at why they are so convenient for vendors and customers alike:
Benefits for customers
- Cost Savings: Customers often pay a subscription fee rather than a large upfront cost, which can make SaaS products more affordable and manageable.
- Accessibility: SaaS products can be accessed from anywhere with an internet connection, making it easy for users to work remotely or from multiple devices.
- Automatic Updates: SaaS providers handle updates and maintenance, ensuring customers always have the latest features and security patches without additional effort.
- Scalability: Customers can easily scale their usage up or down based on their needs, often without requiring significant changes to their infrastructure.
- Reduced IT Burden: SaaS solutions typically require less internal IT support, since the vendor manages the infrastructure and software maintenance.
- Flexibility: Users can often try out different plans or features to find what best suits their needs, with the ability to change their subscription as needed.
Benefits for vendors
- Recurring Revenue: SaaS products typically use a subscription model, providing vendors with a steady, predictable income stream.
- Scalability: SaaS solutions can be scaled easily to accommodate more users without significant changes to the underlying infrastructure.
- Global Reach: SaaS products can be accessed from anywhere with an internet connection, allowing vendors to reach a global audience.
- Lower Distribution Costs: Since SaaS products are delivered over the internet, there are no physical distribution costs, and updates can be rolled out seamlessly.
- Customer Retention: Subscription models encourage ongoing customer relationships and provide opportunities for continuous engagement and upselling.
- Data Insights: Vendors can collect and analyze user data to improve their products, enhance user experience, and tailor marketing strategies.
In short, the benefits of this model far outweigh the shortcomings for all the parties involved. For these reasons, it’s no longer a question of whether SaaS is staying, but how.
SaaS is Becoming More Specialized
The SaaS ‘revolution’ was initiated by solutions that spanned various industries. Products like CRM, ERP, web hosting, and e-commerce can be easily implemented by almost any kind of company, and it was that versatility that propelled its initial growth. This model is known as horizontal, and has been leading the pack until now, but the vertical solutions are getting their spotlight in 2024.
These represent the other end of the spectrum: SaaS tools designed for niche industries and needs. IBM's Genelco which was designed for the insurance sector is a good example of a vertical SaaS tool. While not new (Genelco has been around for 35 years), these solutions are seeing a resurgence of sorts due to a saturated market of more generic tools.
As time goes on, SaaS products will only become more specialized, and better at addressing the specific needs of markets and industries.
Cledara and The SaaS Tools of 2024
We use most of these tools daily, but how popular are they, really, and how much are others paying for them? Gathering the necessary information to make an informed decision on SaaS is not always easy (as we already mentioned, they’re way too many options).
Specially when it comes to pricing, often times, companies will hide the information behind demo pages and other hurdles to get you to book a call. Here’s where Cledara comes in.
Since its inception, Cledara has helped manage more than 1.1 million SaaS purchases and renewals from over 4,000 vendors. We have taken that data and packaged it into easy-to-digest guides for everyone to experience. On this guide you’ll find pricing, unbiased information on key features, use cases, and more.
Pricing
The pricing reflected is an average of what Cledara customers pay for the different tools.
Ranking
The raking is based on the popularity, which one’s got the highest market share amongst Cledara customers. Not their quality. The more companies pay for it, then the higher it will appear in the ranking. In no way does it represent an endorsement by Cledara or its employees. Neither are the tools that appear in this guide a paid promotion.
Top 20 SaaS Tools of 2024
When we look at the final list, the tools with the highest market share are integral to communication, productivity, and development.
When it comes to pricing, the values vary significantly based on the tool's functionality and target user base, with some tools commanding premium prices due to their extensive feature sets. HubSpot ($10,150), Google Workspace ($4,990), and Atlassian ($4,210) are on average the most expensive on the list, offering extensive features and capabilities suited for larger organizations or specialized needs.
On the other end, we’ve got ChatGPT ($210) and Canva ($120), that even thought they’ve become every-day tools for most offices, they are still affordable.
Also, the trend towards AI and automation is evident, with tools like ChatGPT and Zapier making significant impacts on efficiency and integration. Speaking of ChatGPT, we see it along its parent company OpenAI. They’re listed as two different tools because their subscriptions are managed separately.
20 Most Popular Company-Wide SaaS Tools
By leveraging AI SaaS tools, tech companies can enhance their operational efficiency, make informed decisions, and provide better customer experiences—all crucial elements for growth and success in the competitive business landscape.
15 Most Popular Finance and HR SaaS Tools
By leveraging SaaS tools, finance and HR teams can enhance their operational efficiency, improve data accuracy, and focus on strategic activities that drive organizational success. Check out the most popular accounting tools of 2024.
20 Most Popular Marketing SaaS Tools
SaaS tools empower marketers to be more agile, efficient, and data-driven, ultimately helping them to achieve their goals more effectively in a competitive market environment.
10 Most Popular Sales SaaS Tools
SaaS tools offer a range of benefits that can significantly enhance the effectiveness and efficiency of sales teams by improving their customer interactions, and ultimately drive more revenue for their organizations.
5 Most Popular Support and Success SaaS Tools
SaaS tools offer substantial benefits for customer support and success teams by streamlining their processes and enhancing their ability to deliver exceptional service.
20 Most Popular Engineering SaaS Tools
By leveraging SaaS tools, engineering departments can improve their workflows, enhance collaboration, ensure high-quality code, and maintain efficient and effective operations. For more engineering tools, don't forget to visit the most popular monitoring SaaS tools of 2024.
SaaS is Here to Stay
The number of SaaS subscriptions businesses manage has grown exponentially in the last ten years. For example, in that time, Carhartt’s subscriptions have gone on average from 20 to 120. That’s an increase of 505%.
The subscription business model and SaaS tools are evolving at a faster pace than any Finance department can keep up with. The consequences tend to be unforeseen costs, unused seats, and duplicated products. Needless to say, this is not an efficient way to run second-biggest expense of a company.
More often than not, departments work in silos and expect another team to resolve the issue, but surprise, nobody does and action is only taken when it blows up in their faces. This is when data gets exposed, a credit card gets compromised, and people are locked out of the tools they need to do their work. Not good.
For better or worse, the subscription model isn’t going anywhere. It’s just too convenient. The best way to deal with this reality is to learn how to manage it. Luckily, there are platforms like Cledara that can help.
What is Cledara?
Cledara is a comprehensive solution for businesses to manage, track, and control their SaaS subscriptions and associated expenses with enhanced security, user-friendly interfaces, robust support, and integration options.
It is a platform designed to streamline the management of Software as a Service (SaaS) subscriptions and expenses through several key features:
One Place to Manage All of Your Software Spend
Centralized Management
Cledara centralizes SaaS subscriptions, allowing for easy tracking, budgeting, and management. Virtual cards enhance security and streamline payments.
Ease of Use
Cledara has got an intuitive interface and is easy to set up, which simplifies managing software and expenses.
Exclusive Support
From the get go, you’ll be assisted by one of Cledara’s experts who will answer all of your questions and guide you through your onboarding.
Integration
Cledara’s integrations with accounting tools like Xero and QuickBooks automate financial management and reporting.
Expense Control
Features such as automated approval workflows, detailed expense analytics, and the ability to quickly shut down cards or subscriptions help in managing costs and avoiding unexpected expenses.
Managing Software and Spend
Cledara offers a comprehensive suite of tools to manage software procurement and expenditure effectively. From a single platform, users can:
- Approve new software purchases
- Evaluate renewal options
- Ensure vendor compliance
This oversight helps prevent unexpected charges and ensures that software investments align with organizational needs and budgets.
How Cledara Simplifies SaaS Management
Cledara simplifies SaaS management by providing a unified platform for handling all aspects of software management. Key functionalities include:
Real-Time Software Directory
Users have access to an up-to-date list of all software and hosting services, allowing for easy monitoring and management.
Automated Processes
Routine tasks such as access requests and invoice processing are automated, reducing manual effort and the potential for errors.
Proactive Spend Management
The platform helps in identifying cost-saving opportunities by highlighting underused or redundant software, thereby enabling more strategic spending decisions.
Integration and Automation Capabilities
Cledara supports integration with other systems, such as NetSuite, to enhance its functionality and streamline workflows. These integrations allow for seamless data exchange between systems, facilitating more efficient financial and operational processes. Automation capabilities further extend to tasks like budgeting, approvals, and accounting, ensuring that day-to-day software management is as efficient and error-free as possible.