Software as a Service (SaaS) continues to be a rapidly growing option among multiple industry sectors. These packages provide customizable business solutions along with security, maintenance, and upgradeable features. Package deals typically include ongoing service contracts that cement customer relationships.

Like other intangible but necessary business programs, SaaS has undergone a great deal of change over the past several years. Mergers and acquisitions have heightened interest in the field and opened doors for diligent business owners and curious investors.

Key Growth Driver – Virtual Workstations

As the world economy begins to stabilize and even rebound in some cases, traces of the pandemic still abound in the general workforce population. The forced closures and social distancing requirements changed the way the world interacts and does business.

Countless companies and organizations have decided to continue remote operations. These decisions drove the demand for contemporary SaaS solutions, primarily cloud backup tools. Over the past two years, corporations scrambled to find the best and safest software solutions for their unique business needs.

Many of these organizations had not considered the need for virtual training and onboarding, not to mention a large and fully remote workforce. Without time to perform due diligence research or market surveys, executive officers were uncertain about how to navigate this new, virtual workspace.

SaaS companies rose to the occasion with viable solutions and a seamless transition. One of the greatest features of reputable SaaS platforms is the enhanced security that business operators require in order to keep their customer information protected. SaaS technology provides both the efficiency and security that leadership teams desire. As such, the industry gained popularity and created interest among new investors, which continues to grow.

The second half of 2021 indicates a continuance of the first two quarters, with continued growth thanks to continually rising demand.

Merger and Acquisition Activity

The landscape for SaaS merger and acquisition (M&A) activity has been peppered with lots of new, and some unexpected, activity.

Some of the biggest headlines include the Citrix acquisition by Vista Equity, Anaplan by Thoma Bravo, and CloudMed by R1. Just these three examples boast more than thirty billion dollars in M&A activity. Overall, the SaaS mergers and acquisitions throughout the first quarter of 2022 has exceeded six hundred total transactions. In addition to this record high, the industry also capitalized on more than one thousand transactions in the aggregate software sector. The strength garnered throughout 2020 and 2021 is likely to continue throughout the rest of 2022 and beyond.

Record high sales, new ventures, and transactions in the form of mergers and acquisitions have sparked interest in this previously inconspicuous field.

The Future Potential of SaaS

Experienced business owners, investors, and venture capitalists have quickly recognized the importance of SaaS opportunities. Although the market is not new, the recent spike in activity can make it difficult for even tenured investors to evaluate.

We help our clients understand the potential for growth and investment opportunities with SaaS. We conduct multi-phased assessments of database assets, which often complement SaaS company valuations and are useful tools for calculating overall net value. If you’re interested in learning more, contact us today.