Market Overview

The UK Software as a Service (SaaS) market size reached USD 16.3 Billion in 2024 and is expected to grow to USD 51.4 Billion by 2033. The market is projected to expand at a CAGR of 13.49% during the forecast period from 2025 to 2033, driven by increased digital transformation, cost efficiency, scalability, and growing cloud adoption. Leading companies are adopting subscription-based and flexible technological solutions to enhance operational efficiency, positioning the UK SaaS market for substantial growth.

UK Software as a Service (SaaS) Market 

Study Assumption Years

• Base Year: 2024
• Historical Year/Period: 2019-2024
• Forecast Year/Period: 2025-2033

UK Software as a Service (SaaS) Market Key Takeaways

• Current Market Size: USD 16.3 Billion in 2024
• CAGR: 13.49% during 2025-2033
• Forecast Period: 2025-2033
• Rapid increase in cloud integration and adoption is fueling market growth as businesses transition from traditional software to cloud-based solutions.
• Integration of machine learning (ML) and artificial intelligence (AI) within SaaS platforms is enhancing decision-making, automation, and analytics.
• There is a significant shift towards subscription-based pricing models offering cost forecasting, flexibility, and regular updates.
• Government programs promote cloud-based adoption across industries such as retail, healthcare, and finance.
• The rise of remote and hybrid work cultures is increasing demand for cloud-based applications.

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Market Growth Factors

The major factor propelling the expansion of the SaaS market in the UK is the growing integration with the cloud at a rapid pace. As companies adopt digital transformation, cloud services help to be more malleable, which triggers a shift in traditional software. Further, the growing work-from-home culture has triggered this demand. There has been greater incorporation of SaaS with other software in the company to make it more efficient by cutting the cost on infrastructure. Further, the reliance on the cloud helps to improve the safety of data by following guidelines. For instance, Keepit, a company, introduced its United Kingdom office in London in March 2024 to better protect SaaS data.

Another major contributing factor in the expansion of SaaS solutions is the integration of machine learning (ML) and artificial intelligence (AI) in these solutions. AI-based solutions enhance decision-making and analytics capabilities. In December 2023, Seez intended to enter the UK market with its SaaS solution based on AI for the automotive retail business. AI helps in carrying out analytics related to forecasting and risk management. ML optimizes the processing of huge data, which is quite important in the context of streamlining performances.

The UK SaaS industry is also seeing the light of day with regards to the rapid transition being seen in subscription pricing. This allows businesses to estimate expenses. Subscription pricing plans vary from traditional software bought once. This model also increases customer retention as there is innovation and development. Usage pricing is also seeing the light of day. This pricing depends on the data produced through software use. This allows businesses to grow. For example, in Apr 2023, UK-based SaaS company M3ter raised $14m funding for its use-based pricing solutions.

Market Segmentation

Component Insights:

• Software
• Services

These components describe the two primary elements of the UK SaaS market, encompassing platform software and related services.

Deployment Insights:

• Public Cloud
• Private Cloud
• Hybrid Cloud

The market segments services based on deployment environments, with public, private, and hybrid cloud options available for SaaS delivery.

Enterprise-size Insights:

• Small & Medium Enterprises
• Large Enterprises

SaaS adoption is segmented by enterprise size, addressing needs of both SMEs and large organizations.

Application Insights:

• Customer Relationship Management (CRM)
• Enterprise Resource Planning (ERP)
• Human Capital Management
• Content, Collaboration & Communication
• BI & Analytics
• Others

Applications cover a range of operational areas including CRM, ERP, workforce management, communication, business intelligence, and additional uses.

Industry Insights:

• Banking, Financial Services and Insurance (BFSI)
• Retail and Consumer Goods
• Healthcare
• Education
• Manufacturing
• Travel & Hospitality
• Others

Industries adopting SaaS solutions include BFSI, retail, healthcare, education, manufacturing, travel, hospitality, and others.

Regional Insights

London emerges as a significant regional market within the UK SaaS sector. Other key regions include South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others. The report provides comprehensive analysis across these regions, though specific market share or CAGR by region is not detailed. These areas benefit from technology adoption and contribute to overall market expansion.

Recent Developments & News

In November 2023, Microsoft announced a partnership with the UK Defense Science and Technology Laboratory (DSTL) to promote responsible AI adoption in defense. Microsoft will provide early access to software roadmaps while DSTL will share their AI playbook. In September 2024, Adaptive Shield partnered with Protos Networks to enhance SaaS security in the UK. This collaboration provides Protos Networks' customers improved access to Adaptive Shield's SaaS Security Posture Management and Identity Threat Detection platforms, bolstering security capabilities.

Key Players

• Keepit
• Seez
• Microsoft
• Adaptive Shield
• Protos Networks
• M3ter

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