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Software as a Service (SaaS)

An advantaged business model in the technology industry and beyond

Cloud computing and subscription-based business models are changing the software industry. By the end of 2016 SaaS represented 25% of the total enterprise software market. It is expected to reach 40% by 2021—a significant milestone to achieve in such a short period of time.

Customers, vendors, and investors alike are reaping the rewards. Customers are enjoying increased flexibility and lower total cost of ownership. Vendors are seeing a rejuvenation in core businesses and moving from stagnation to growth. Investors are happy with higher returns as the market values SaaS companies two to three times higher than their on-premise equivalents.

The SaaS journey is hard. It's a different business model that requires new operating practices. At BCG, we've helped numerous clients through the journey. We've helped traditional software companies make the shift from selling on-premise licensed software to SaaS. We've helped SaaS natives accelerate their performance. And we've helped companies in other industries build SaaS businesses and new value propositions on top of their traditional businesses.

To learn more, contact us at SaaS@bcg.com.

Self-Assess Your SaaS Maturity

BCG's SaaS Excellence application allows users to assess the maturity levels of their SaaS capabilities, and their maturity as SaaS companies overall. The app instantly provides an initial, high level understanding of potential areas for improvement.

The tool consists of:

  • A quantitative survey to assess the true health of the business
  • A qualitative survey to assess the level of maturity in the operating model

BCG’s Work in Software as a Service

Kronos, a workforce management software provider, is undergoing a transformation to SaaS. BCG has facilitated this change. Watch the video to see Kronos’ leaders share their thoughts on what triggered the shift, what it takes to transform, and what the benefits are.

More Insights on Software as a Service

Developing Software at the Speed of the Cloud

Cloud developers are both revising the rules for writing software and breaking speed records in the release and updating of code. Traditional software teams can learn a lot from cloud development teams about unleashing creativity and satisfying customers.

Understanding Trends in Software and the Cloud

Understanding Trends in Software and the Cloud

The Cloud Should Be Lean

The Future of On-Premise Software

The economics of software and cloud companies has changed, with those changing to a service model gaining more revenue—despite an initial dip in profit margins.

BCG’s Experts in SaaS

View All Experts
  • Global lead for Software, SaaS, and PaaS sector
  • Next-Generation Sales models topic co-leader
  • Lead for Technology Media & Telecom practice, US East Coast
  • Leadership team, BCG Gamma advanced analytics and artificial intelligence
  • Software and IT services
  • Telecommunications
  • IT distribution
  • Automotive
  • Hardware-to-software transformation
  • Network equipment, wireless, and wireline product strategy
  • Equipment and infrastructure as a service
  • IT cost reduction
  • Big Data
  • Artificial intelligence
  • Cloud business model transformations
  • Product management and engineering
Max Hong

Partner & Managing Director

San Francisco
  • Leads Technology, Media & Telecommunications practice on the US West Coast
  • ROI optimization
  • Promotion effectiveness
  • Pricing strategy
Technology Industries

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