SaaS Based Enterprise Resource Planning (ERP) Market Size, Share, Trends, Growth and Forecast 2032

SaaS Based Enterprise Resource Planning (ERP) Industry Prospective:

The global SaaS based enterprise resource planning (ERP) market size was worth around USD 72.15 billion in 2023 and is predicted to grow to around USD 170.12 billion by 2032 with a compound annual growth rate (CAGR) of roughly 10.00% between 2024 and 2032.

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SaaS Based Enterprise Resource Planning (ERP) Market: Overview

Software-as-a-service (SaaS) based enterprise resource planning (ERP) is a type of cloud-based service. It deals with providing companies or clients with ERP solutions by a vendor or a third-party solutions provider over the Internet. The ERP programs are delivered as a service and sold through a subscription model. ERP is a program used by companies to optimize resource allocation, planning, and utilization for maximum benefit. It is used for day-to-day operations and can be used across segments such as risk management & compliance, project management, procurement, accounting, and supply chain operations. ERP solutions have become integral to companies being driven through technology. However, implementing these solutions in-house requires extensive investments in terms of new hardware systems along with supporting infrastructure.

Additionally, companies will also have to develop an ecosystem filled with skilled professionals to manage the several technical aspects associated with ERP systems. The SaaS model of ERP implementation thus proves beneficial since it allows companies to focus on their core business. Vendors providing ERP programs through the Internet are responsible for the overall management of the tool while the client only has to pay for the services. The digitization rate in corporate and commercial industries is expected to fuel the demand for SaaS based enterprise resource planning (ERP) in the coming years.

Key Insights:

• As per the analysis shared by our research analyst, the global SaaS based enterprise resource planning (ERP) market is estimated to grow annually at a CAGR of around 10.00% over the forecast period (2024-2032)
• In terms of revenue, the global SaaS based enterprise resource planning (ERP) market size was valued at around USD 72.15 billion in 2023 and is projected to reach USD 170.12 billion, by 2032.
• The market is projected to grow at a significant rate due to the growing efforts toward reducing business expenses
• Based on deployment segmentation, public cloud was predicted to show maximum market share in the year 2023
• Based on end-user segmentation, healthcare was the leading segment in 2023
• On the basis of region, North America was the leading revenue generator in 2023

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SaaS Based Enterprise Resource Planning (ERP) Market: Growth Drivers

Growing efforts toward reducing business expenses will push higher adoption of SaaS-based ERP

The global SaaS based enterprise resource planning (ERP) market is projected to grow due to the growing efforts undertaken by companies to reduce the overall business expense. In the last few years, businesses have taken drastic measures to reduce business costs and deliver better monetary results. In December 2023, India’s financial technology company, Paytm announced the layoff of more than 1000 employees. The company states cost cutting as the primary reason for mass layoff. In addition to this, several other technology giants including Amazon and Google have reduced their workforce as an expense-control measure. SaaS-based ERP solutions offer excellent cost-saving opportunities. Through this model, companies have the option to outsource their application needs. They do not have to spend a hefty amount in constructing an infrastructure for supporting designing, coding, and use of ERP systems in-house.

The exact cost-saving may differ based on the subscription model of the vendor and the extent of the software application. In some cases, the cost-benefit may not be high. However, research suggests that the software-as-a-service model has more benefits attached to it. For instance, it provides companies with higher flexibility in terms of resource allocation. Moreover, the speed and scalability parameters of SaaS ERP remain unmatched. The business model has also become popular due to the value-based services offered by vendors providing SaaS ERP services. As more companies seek programs and services that can help in business process optimization the demand for SaaS based enterprise resource planning programs is likely to rise.

SaaS Based Enterprise Resource Planning (ERP) Market: Restraints

Risk of data theft and privacy concerns may limit the market growth rate

The global SaaS based enterprise resource planning (ERP) market is expected to be restricted due to the high risk of data theft associated with these solutions. Companies undertaking the assistance of third-party solutions providers are required to share business-related information with the vendor. This increases the number of people that have access to critical business data thus leading to higher scope of data theft. In addition to this, companies must ensure that customer privacy is maintained at all levels. Certain countries such as the European Union have strict privacy laws.

Non-compliance to Article 83 (5) of the General Data Protection Regulation law in Europe can lead to fines of up to 20 million euros or 4% of the total global turnover of the company. The rise in the number of online threats has resulted in potential customers showing resistance toward adopting cloud-based solutions.

SaaS Based Enterprise Resource Planning (ERP) Market: Opportunities

Growing efforts toward improving digital safety and reducing cyber crimes may aid in further market growth

The global SaaS based enterprise resource planning (ERP) industry can benefit from the rising efforts toward improving digital safety across the globe. Technology companies across the globe have shown faith in Artificial Intelligence (AI) systems for curbing digital threats. These novel solutions can be implemented by SaaS ERP providers to improve their respective services during the forecast period.

In February 2023, Google announced research grants worth USD 2 million toward strategic partnerships that the company will develop with several universities including the University of Stanford, Carnegie Mellon, and Chicago. The research will be directed toward leveraging AI to enhance cyber security.

Increasing launch of new ERP solutions and service providers will encourage small and medium sized companies

The global SaaS based enterprise resource planning (ERP) market is projected to grow further due to the launch of new and improved ERP solutions and service providers. There is a growing need for customized solutions that meet industry or company-specific problems.

In July 2023, PanGrow, a dominant provider of sophisticated business solutions, launched an ERP solution along with customer relationship management (CRM) solutions tailored to the needs of small & medium enterprises (SMEs). These ERP solutions offered by the company provide financial management services along with human resource and payroll planning solutions.

SaaS Based Enterprise Resource Planning (ERP) Market: Challenges

Challenges associated with the integration of new solutions with existing systems may pose growth threats

The global SaaS based enterprise resource planning (ERP) market will be challenged by the problems that arise when integrating novel systems with existing legacy protocols and technology. Some of the challenging parameters that organizations may face during integration include problems with system compatibility and data migration along with issues related to drafting new protocols that align with SaaS-based ERP systems. The discomfort shown by employees in using the tool must be addressed professionally to ensure a seamless transition.

SaaS Based Enterprise Resource Planning (ERP) Market: Segmentation

The global SaaS based enterprise resource planning (ERP) market is segmented based on deployment, end-user, and region.

Based on deployment, the global market segments are hybrid cloud, private cloud, and public cloud. In 2023, the highest growth was observed in the public cloud segment. These solutions are powered by remote servers that are entirely managed by the service provider. The Internet plays a crucial link between the client and the remote servers. The demand for hybrid clouds is witnessing a rise. This includes some parts of cloud-based services and on-premise deployments. In 2021, the global public cloud market was valued at USD 445 billion.

Based on end-user, the global market divisions are BFSI, retail, healthcare, manufacturing, and others. In 2023, the healthcare segment dominated the segmental growth rate. The same trend is expected in the future. ERP solutions play a critical role in the healthcare sector as these programs help healthcare centers regulate essential parameters of their operations including cost management, patient records, inventory management, and human resource planning. The growing adoption of digital solutions in the healthcare sector will act as the promotional background. As per market research, more than 80% of companies are currently using some form of AI tool for improved services.

SaaS Based Enterprise Resource Planning (ERP) Market: Report Scope

SaaS Based Enterprise Resource Planning (ERP) Market: Regional Analysis

North America to continue its lead during the projection period

The global SaaS based enterprise resource planning (ERP) market will be led by North America during the forecast period. The reasons for higher regional growth are multifold. Primarily, the US is one of the world’s most technologically advanced countries. It is home to technological pioneers who have managed to drive technical growth globally for decades. The presence of a mature market in terms of cloud-based technology has been influential in ensuring that the region remains dominant during the projection period. Additionally, regions such as the US and Canada are hosting several startups working extensively to promote SaaS-based solutions.

In August 2023, Houston-based Innovapptive, a start-up working in the connected worker-integrated applications sector, announced the launch of mRounds. It is a SaaS-based solution specially developed for the company’s mobile operator rounds product. mRounds can be integrated either into an existing ERP solution or used as a standalone SaaS solution. In March 2023, IBM launched IBM Hybrid Cloud Mesh. This SaaS model is a hybrid multi-cloud infrastructure. Such innovations are likely to drive the regional market demand rate.

SaaS Based Enterprise Resource Planning (ERP) Market: Competitive Analysis

The global SaaS based enterprise resource planning (ERP) market is led by players like:

• Oracle ERP Cloud
• SAP S/4HANA Cloud
• Plex Systems
• Microsoft Dynamics 365 ERP
• SYSPRO ERP
• NetSuite ERP
• Rootstock Software
• Workday Financial Management
• Acumatica Cloud ERP
• Infor CloudSuite
• IQMS
• Epicor ERP
• FinancialForce
• Unit4 ERP
• Sage Intacct.

The global SaaS based enterprise resource planning (ERP) market is segmented as follows:

By Deployment

• Hybrid Cloud
• Private Cloud
• Public Cloud

By End-User

• BFSI
• Retail
• Healthcare
• Manufacturing
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa