What is SaaS Market Analysis?

SaaS market analysis represents the process of evaluating the Software as a Service (SaaS) industry to obtain information about specific topics like market size, potential business opportunities, competition, customer requirements and trends.

Gaining these insights is helpful for SaaS businesses of all types and sizes.

A SaaS market share is the proportion of the industry market that your business can expect to win when attracting a new customer. It’s your percentage of the total possible revenue available within a particular target market compared to your direct competition.

Follow these steps to work out your individual SaaS market size within your industry:

• Describe your ideal customer: research the individual customer who is the ideal buyer of your product. 
• Calculate the rough size of the market: identify the number of customers that conform to your target profile within the industry. 
• Commit to your particular price: finalize how much revenue you can expect to generate from each customer.
• Work out Total Addressable Market (TAM): multiply together the number of forecasted customers within the market by the price of your SaaS.

Market growth results in more potential customers, but also increased competition. Different trends affect the possible size of your own market share: 

• Increased cloud adoption: Customers are increasingly willing to adopt cloud solutions, which means that SaaS software is becoming increasingly popular for business. 
• Subscription-based models: increased interest in subscription-based software models.
• Software developments: newly developed features emerging in the SaaS software market.

This is the way to find the right target market for your SaaS: 

• Analyze existing customers: identify the profile of existing customers so you can target others who have similar traits and needs. It’s easier to appeal to the same industries, company sizes, and prove you can solve particular challenges. 
• Problem-focused approach: market your SaaS as solving a particular set of problems for a particular type of business.
• Competitor research: learn from your competitors when defining the strategy for your SaaS business.

Every business needs a code of ethics. SaaS is no different: 

• Data privacy protection: protect customer data, follow relevant data privacy regulations, and observe strict standards in handling data. 
• Eliminate bias: try to be neutral in how you collect and analyze data so you can represent truth accurately. 
• Use fair competition: don’t engage in unethical practices when learning about your competitors. 

Analogy: you’re attempting to build a complex but complete picture of your entire market through this analysis. Assimilate the various elements, like a puzzle, to help you understand your market. Include customer data, SaaS industry trends, and competitor pricing.