August 3, 2020
3
MIN READ

Covid's impact on SaaS: 5 months in

SaaS Insights

How have SaaS companies been doing lately?

A lot of articles have been written about how well SaaS companies have been doing during the lockdown due to the shift to remote working and the increasing demand for SaaS products. But, how about afterwards? Have things gotten better or worse for SaaS companies in this new world that we all find ourselves in?

We thought it was a good opportunity to provide some answers with fresh data from our platform. To figure this out, our data team looked at two key metrics: the number of SaaS tools and the SaaS spend.

SaaS market in April: Sharp reduction

Number of SaaS tools: companies reduced the number of SaaS tools that they use by an average of 11%. In other words, they cancelled an average of 1 out of almost every 10 SaaS subscriptions they had.

SaaS spend:  fell by an average of 4%. Considering the relatively smaller size of this number compared to the number of SaaS tools that were cut, presumably companies cancelled their smaller and cheaper software subscriptions that were less critical to their businesses.

SaaS market in May: Growth to pre-COVID levels

Number of SaaS tools: the number of SaaS tools used by companies grew by 17%, more than recovering the losses in April and reaching the average number of SaaS tools used by companies to February levels. This increase signifies a return to pre-COVID numbers.

SaaS Spend: grew by 25%, driven by both an increase in the number of SaaS tools and a trend for companies to switch from monthly subscriptions to annual payments, presumably to save money in the long term.

SaaS market in June: Pace accelerates

Here is where it gets interesting. After reaching pre-COVID levels in May, one might guess that SaaS subscriptions growth would slow down. Well, that didn’t happen at all!

Number of SaaS tools: grew by a further 22%.

SaaS Spend: grew by 16%. This means that the number of SaaS tools went up, but the average spend on each new SaaS tool added in June was lower than average, signalling a return of the niche SaaS tools.

SaaS: Leaders of the recovery?

SaaS software is not only at the heart of tech companies but also plays an increasingly noticeable role in traditional firms. This bodes well for the SaaS sector as more companies figure out the role SaaS has to play in this post-COVID world.

At Cledara, we like to be optimistic. We believe that this relaunch in the SaaS market is not only a positive indicator for the tech industry but also the traditional one.

Let’s hope we are right on this one!

This analysis was inspired by questions provided by people like you. We love receiving new and interesting questions that help us think about data in new ways.  If you found this post interesting and have other questions that you’d like us to help answer, drop us a line at hello@cledara.com.

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