In this article, we shall go over the 10 biggest SaaS companies in Europe. If you want to skip our detailed analysis of the SaaS sector, go directly to the 5 Biggest SaaS companies in Europe.
According to McKinsey and Company, the global SaaS sector is currently worth over $3 trillion and according to estimates, the figure could very well climb to $10 trillion by 2030. The median growth rate of the top 100 public SaaS companies by revenue in the United States was 22 percent as of 2022, with the top quartile achieving mammoth growth percentages of 40 percent. The report also outlines reasons for the stunning performance of the SaaS sector, attributing its growth to its asset-light nature, lower overhead and logistical costs, ease of scale, the cloud's extensibility and elasticity, and incentives in partnering with major cloud service providers to save traditional companies from carrying out technical work themselves. According to a recent market report by BusinessWire, the top countries in the world for SaaS companies are the United States, the UK, Canada, Germany, France, India and China.
The SaaS Sector in Europe: An Analysis
According to another report by McKinsey, in the past decade, owing to an increasing trend in digital behaviors fueled by the COVID-19 lockdowns, the software sector has achieved a growth rate that is twice that of the aggregate of all major industries. Whilst the global economy depreciated by 3.3 percent in 2020 compared to 2019, revenue in the SaaS sector boomed by 2.7 percent and is further predicted to grow at twice the rate of the global GDP in the next five years.However, the report also notes that SaaS has significantly eroded the strength of certain economies of the world, such as Europe. By September 2021, seven of the ten most lucrative companies in the world belonged to the SaaS sector, a glaring reflection of the rising economic importance of the industry. However, Europe has lagged behind these developments as only 7 percent of the 100 most valuable companies in Europe are software companies and as of today, not a single European company features on the list of the world’s ten most valuable software and software-enabled companies, and there are just three among the top 20.
Some of the biggest global players in the SaaS sector today are Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). However, in this article, we shall only cover the 10 biggest SaaS companies in Europe by market capitalization as of August 1.
Based in Cambridge, England, AVEVA Group plc. (LSE:AVV) is a multinational information technology consulting company with a primary listing on the London Stock Exchange and is a component of the FTSE 1000 index. The company specializes in information technology, technology consulting, CAD/CAM software, enterprise solutions, and manufacturing execution systems.
'AVEVA Connect' is AVEVA's (LSE:AVV) cloud-based SaaS platform which is a digital transformation hub for the industrial sector to drive and track innovation, growth and sustainability. It provides a single, secure cloud environment for all AVEVA solutions and digital assets, and is designed to span the entire business including engineering, design, and procurement to optimize operations. With over a 100,000 active users monthly, companies all around the world use the industrial cloud platform to connect their data and communities. Another cloud based SaaS platform offered by AVEVA (LSE:AVV) is AVEVA Flex, an industrial software subscription service which aids companies in the purchase, design and use of their industrial software.
With a total revenue of more than $1.4 billion in the first quarter of 2022, and over 6500 employees worldwide, AVEVA (LSE:AVV) is one of the leading names in industrial software and one of the biggest SaaS companies in Europe by market capitalization. The company is projected to grow 10.7% per annum for the next five years.
9. Wise plc. (LSE:WISE)
Market Cap as of August 9: $8.36B
Wise plc. (LSE:WISE) is a financial technology company based in London, UK. Formerly known as TransferWise, the global technology company operates in over 170 countries and through their application, users can send, spend, convert and receive money internationally, primarily from the United States to about 80 countries. Wise (LSE:WISE) provides a cost-effective alternative to banking systems, which tend to charge heavily to transfer money abroad. With a seed funding of almost $1.3 million, Wise (LSE:WISE) was named as one of "East London's 20 hottest tech startups" by The Guardian in 2012. The company went public in July 2021 with a primary listing on the London Stock Exchange, being valued at $11 billion.
Wise's (LSE:WISE) cloud banking application is subscribed to by over 13 million people and businesses in over 170 countries. Furthermore, as part of the company's SaaS product suite, 'Wise for Banks' gives banks and other financial service providers the opportunity to offer customers a swift and transparent international money transfer experience, with the luxury of never having to leave the banking application. All transfers are carried out using the real exchange rate and charges the customer an upfront fee.
As of the first quarter of 2022, Wise (LSE:WISE) reported a total revenue of $677.1 million. The company is projected to grow 34.15% per year over the next five years according to analysts, making it a strong prospect to feature on the list of the 10 biggest SaaS companies in Europe. Like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), it is also one of the largest SaaS providers in the world by market cap.
Clarivate (NYSE:CLVT) is a British-American publicly-traded analytics company based in London, UK. It operates and owns a range of subscription-based services which provide solutions to bibliometrics, scientometrics, business/market intelligence, competitive profiling for pharmaceutical and biotech patents, and trademark protection. Founded in 2016, Clarivate (NYSE:CLVT) reported a total revenue of $1.88 billion in 2021. With over 11,000 employees, Clarivate (NYSE:CLVT), like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), is one of the biggest SaaS companies in the world.
Clarivate (NYSE:CLVT) is highly regarded in the scientific community as one of the only companies in the world to calculate the impact factor, using data from its 'Web of Science' product family, which include subscription-based applications like Publons, EndNote and ScholarOne. Other product families include Cortellis, comprising of science-related intelligence software; Derwent, which is a database containing patent applications; and CompuMark, which includes information services used by brands and trademark professionals.
Baron Funds mentioned Clarivate (NYSE:CLVT) in their Q1 2022 investor letter. This is what they said:
“We reduced our stake inClarivate Plc (NYSE:CLVT), an information services company focused on the scientific and academic markets, after the company reported particularly disappointing fourth quarter earnings results.”
Frequently raising anti-monopoly concerns, Clarivate (NYSE:CLVT) has managed to achieve stellar growth in a significantly short period of time through numerous acquisitions: in the 6 years since its inception, Clarivate (NYSE:CLVT) has acquired over a dozen companies, and in some cases, even bought companies in direct competition with each other.
7. The Sage Group plc. (LSE:SGE)
Market Cap as of August 9: $8.95B
Headquartered in Newcastle upon Tyne, England, The Sage Group plc. (LSE:SGE) is a multinational enterprise software company, and, as of 2022, is the UK's second largest technology company, the world's largest technology supplier to small businesses, and the world's third largest supplier of enterprise resource planning software. The company has over 6.1 million customers and 13,400 employees in over 24 countries around the world. Sage (LSE:SGE) has dedicated its key industry focus on software development, cloud-based programming, and financial management.
'Sage Intacct' is an American subsidiary of Sage (LSE:SGE) which provides a cloud-based financial management SaaS application operating in five regions, including the US, the UK, Canada, Australia and South Africa. 'Intaact' automates most basic to complex accounting processes, offering multiple cloud-based accounting applications which enable businesses to manage and pay bills, cover costs and facilitate payroll functions. The application has a range of subscription-based accounting products which include accounts payable, accounts receivable, cash management, order management and much more. Furthermore, Sage (LSE:SGE) has also released add-on software applications for contract and subscription-billing, contract revenue management and fixed assets. It makes way for the integration of third-party software.
Sage (LSE:SGE) reported an annual revenue of $2.23 billion in the fiscal year of 2021, and a profit-to-equity ratio of 25.94 as of August 9. With growth estimates of 12.05% per year over the next 5 years, Sage (LSE:SGE) has cemented its place on the list of the 10 biggest SaaS companies in Europe.
Based in Luxembourg City, Luxembourg, Globant S.A (NYSE:GLOB) is an IT and software development company operating in 18 countries globally, most notably including the UK, the United States, Canada, India, Germany, and France. Founded in 2003 in Buenos Aires, the company relocated to Luxembourg. Globant S.A (NYSE:GLOB) specializes in software development, mobile application development, social network development and mainframe migration. With over 25,500 employees globally, and an annual revenue of almost $1.3 billion in 2021 , Globant S.A. (NYSE:GLOB), like Adobe Inc. (NASDAQ:ADBE), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), is one of the largest software and software-enabled companies in the world.
According to Globant S.A's (NYSE:GLOB) official website, the company launched a new Services over Platforms (SoP) model to bring together the best features from the existing traditional professional services and SaaS models. Through this model, Globant S.A. (NYSE:GLOB) charges the SaaS portfolio by assigning a cost-per-user per month, per usage, or per transaction, depending on the type of platform, a move which resembles models occupied by other SaaS companies.
Baron Funds, an asset management firm, mentioned Globant S.A. (NYSE:GLOB) in their Q1 2022 investor letter, a copy of which can be obtained here. This is what they had to say:
“We also initiated a position inGlobant, S.A. (NYSE:GLOB), a provider of outsourced software development, design, and digital marketing services for business customers. Globant (NYSE:GLOB) helps companies such as Disney (NYSE:DIS), Electronic Arts (NASDAQ:EA), and Banco Santander (NYSE:SAN) pursue digital transformations using a highly skilled workforce of over 23,000 software engineers and consultants primarily based in Latin America. These employees are trained in the latest technologies, including cloud infrastructure, cybersecurity, data analytics, artificial intelligence, digital marketing, enterprise software platforms, blockchain, connected devices, and metaverse. The company was founded in 2003 by four friends in Argentina who still run the company, including Chairman and CEO Martín Migoya. Globant (NYSE:GLOB) serves over 1,100 customers across a variety of sectors, but its largest vertical is financial services. The company helps financial institutions adopt digital lending practices, improve operational efficiency, optimize risk management practices, comply with changing regulations, and launch new payment and open banking solutions.
We have long admired Globant’s (NYSE:GLOB) success and used a recent valuation pullback to buy the stock. Like our other digital IT services companies (e.g., Endava, Accenture, and CI&T), Globant (NYSE:GLOB) benefits from the growing need for digital transformation from businesses around the world. Revenue and earnings per share have grown at annualized rates of 32% and 29%, respectively, over the last five years. Management noted on the most recent earnings call that “demand for our end-to-end digital services and platforms is much stronger now than it was before the COVID-19 pandemic,” which should support robust growth in the coming years. Globant (NYSE:GLOB) operates in a large and fast-growing global market that IDC estimates is approximately $650 billion in size growing at a mid-teens rate. Globant (NYSE:GLOB) is growing much faster than the market from both organic expansion and accretive acquisitions. While barriers to entry are low in the IT services industry, barriers to success are high due to long sales cycles, the importance of strong reputations and personal relationships, and a global shortage of IT talent. In contrast to other digital IT services companies based in central and eastern Europe, Globant’s (NYSE:GLOB) presence in Latin America confers advantages from being in the same time zone as North American clients and from lower geopolitical risk around the Russia-Ukraine war.”
The Rule of 40 is a principle that states a software company's combined revenue growth rate and profit margin should equal or exceed 40%. SaaS companies above 40% are generating profit at a rate that's sustainable, whereas companies below 40% may face cash flow or liquidity issues.
There are currently approximately 30,000 SaaS companies. Globally, there are about 14 billion SaaS customers. The US has the largest proportion of SaaS companies (around 60%). Salesforce has the largest SaaS market share at just under 10%.
What is SaaS (Software as a Service)? Software as a service (SaaS) is a cloud-based software delivery model in which the cloud provider develops and maintains cloud application software, provides automatic software updates, and makes software available to its customers via the internet on a pay-as-you-go basis.
Your SaaS magic number should be as high as possible, but any number above 0.75 is a good benchmark for your company. A magic number below 0.5 indicates problems with your business model, while a magic number between 0.5 and 0.75 should cause you to reconsider your growth investments.
The rule of 70 is a basic formula used to estimate how long it will take for an investment to double in value. To use the rule of 70, simply divide 70 by the annual rate of return. The rule of 70 only provides an estimate, not a guarantee, of an investment's growth potential.
Salesforce and Microsoft made up over 29.5% of the SaaS market share in 2017, but just 18% of the market share in 2021. ... Salesforce is now the market leader in public cloud SaaS (IDC)
Yes, Netflix is a SaaS company that sells software to observe permitted videos on demand. It follows a subscription-based model whereby the user selects a subscription plan and pays a stable sum of money to Netflix monthly or annually.
CTSS was the first form of SaaS. It involved multiple 'dumb' terminals (monitors and keyboards without CPUs) networked to a mainframe computer – a software delivery system known as time-sharing. All applications and data stayed on the mainframe.
Patrick Campbell, SaaS founder, strategic-value connoisseur, and cofounder of Profitwell joined up with the SaaS Mag team for our 2nd issue to explain the SaaS pricing pitfalls you need to avoid. Subscribe to SaaS Mag here. Poor pricing doesn't affect just your MRR and ARR.
Accessibility: Ability to run via an internet browser 24/7 from any device. Operational Management: No installation, equipment updates or traditional licensing management. Cost Effective: No upfront hardware costs and flexible payment methods such as pay-as-you-go models.
AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.
Is Skype SaaS? Yes! Skype for Business Server is cloud-based communication and collaboration solution, that offers the best communication and collaboration capabilities in the industry as part of Software as a Service (SaaS).
In a SaaS company, the Customer Acquisition Costs (CAC) refers to how much your company spent to convince customers to buy your software or service. The total cost refers to the sales and marketing spend including personnel and program cost.
The most important SaaS KPIs are churn, monthly recurring revenue (MRR), customer lifetime value (CLV) and customer acquisition cost (CAC). These deliver essential insights into your customers, as well as your company's financial health and prospects.
ARR multiples are the ratio between Annual Recurring Revenue (ARR) and company valuation. The Multiple can be found by dividing the Valuation by ARR. i.e., Multiple = Valuation / ARR. This metric is considered a great way of calculating the value of private SaaS companies.
The Rule of 69 is a simple calculation to estimate the time needed for an investment to double if you know the interest rate and if the interest is compound. For example, if a real estate investor can earn twenty percent on an investment, they divide 69 by the 20 percent return and add 0.35 to the result.
The 70 part of the 70/30 rule refers to what you do with 70% of your net income every month. That means if you receive $6,000 per month, you would take 70% of that, or $4,200, and use that to cover all of your expenses. If you make $3,000 per month, applying the 70% rule, your budget would be $2,100.
For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72/10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double ((1.107.3 = 2). The Rule of 72 is reasonably accurate for low rates of return.
Zoom is a cloud-based SaaS application that allows private individuals as well as businesses to virtually interact with each other. Communication can occur via text, audio, video, or a combination of the three.
over the next few years. Compared to other cloud services, SaaS has a substantial advantage because it is the first fully successful cloud service. According to Gartner, SaaS will continue to dominate the market until 2022.
1. Salesforce. The big daddy of the list, Salesforce is a top SaaS company that launched the concept based on customer relationship management (CRM). It has since expanded into platform development, marketing, machine learning (ML), analytics, and social networking.
There are two different types of Software as a Service model, horizontal SaaS and vertical SaaS. A horizontal SaaS is a structure well used by established cloud services such as Salesforce, Microsoft, Slack, Hubspot etc.
Netflix, Spotify, Dropbox and Slack are common SaaS products, in which the product is then delivered to users over the internet on a subscription basis, giving users the flexibility to not have to worry about upfront installation purchases or ongoing maintenance costs.
Gmail is one famous example of an SaaS mail provider. PaaS: Platform as a Service The most complex of the three, cloud platform services or “Platform as a Service” (PaaS) deliver computational resources through a platform.
Messaging applications like WhatsApp, Facebook messenger etc are SaaS? And how? No. “SaaS” has, like “Cloud”, become a term that no longer really reflects its current meaning.
Second to Salesforce, LinkedIn is the second largest SaaS company in the world. Unlike most SaaS companies which are B2B, LinkedIn is a B2C2B company. LinkedIn attracts hundreds of millions of consumers to post resumes online and sells this data and access to its audience to advertisers and recruiters and salespeople.
Nike and Starbucks are as SaaS as Microsoft and Adobe. Two tech companies, the most iconic lifestyle brand in the world and the biggest chain of coffeehouses.
What is SaaS? Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.
Millions of individuals all over the world use email services (Gmail, Hotmail, Yahoo), cloud storage services (Dropbox, Microsoft OneDrive), cloud-based file management services (Google Docs), and so on. People may not realize it, but all of these cloud services are actually SaaS services.
Nevertheless, as they continue to increase profits generated by their software platforms, Apple's standing as a SaaS company will undoubtedly become stronger and stronger over time; their services now generate as much as 29% of the company's gross profit.
Tesla Third Row - Ross: Tesla becoming a Software as a Service (SAAS) Company. Tesla's tech opportunities seem endless. CEO Ross Gerber joins the podcast Third Row Tesla to discuss the reality of the car manufacturer becoming a Software as a Service (SAAS) Company.
However they serve the industries of the world in a big way. Software is also expensive, and this is one way that the company made money. ... Microsoft is King of Computer Software.
So is GoDaddy a SaaS company? Probably, or at least, close enough. Its Business Applications segment is now its fastest growing of its 3 product segments, at a $650m+ run-rate and growing 20% year-over-year, vs 12% overall for the business as a whole.
First of all, to answer the question in the title: Yes, Netflix is a SaaS company that sells software to watch licensed videos on demand. It follows a subscription-based model whereby the user chooses a subscription plan and pays a fixed sum of money to Netflix monthly or annually. SaaS is not a new concept.
Alibaba Cloud provides cloud computing IaaS, PaaS, DBaaS and SaaS, including services such as e-commerce, big data, Database, IoT, Object storage (OOS), Kubernetes and data customization which can be managed from Alibaba web page or using aliyun command line tool.
If you've used a web-based email service such as Outlook, Hotmail, or Yahoo! Mail, then you've already used a form of SaaS. With these services, you log into your account over the Internet, often from a web browser.
Adobe Creative Cloud is a subscription plan that offers Adobe's creative products such as Photoshop and Premiere Pro. The products included in the Adobe Creative Cloud are examples of SaaS.
So, for example, the primary offerings associated with providers such as Yahoo, Google, Ebay, and Amazon are typically not the types of SaaS solutions that most enterprises would leverage, internally, to address common business problems – they tend to target the needs of consumers more than those of an enterprise.
The Rule of 40—the principle that a software company's combined growth rate and profit margin should exceed 40%—has gained momentum as a high-level gauge of performance for software businesses in recent years, especially in the realms of venture capital and growth equity.
The rule of 40 formula requires just two inputs, growth and profit margin. To calculate this metric, you simply add your growth in percentage terms plus your profit margin. For example, if your revenue growth is 15% and your profit margin is 20%, your rule of 40 number is 35% (15 + 20) which is below the 40% target.
For SaaS businesses, Rule of 40 is a success indicator that is focused on a company's health and long-term sustainability. According to this rule of thumb, a business' combined growth rate and profit margin should be over 40% to be considered attractive by investors and acquirers.
The SaaS Metric Average Revenue Per Account (ARPA) is the revenue generated per account, usually calculated on a monthly or yearly basis. It is sometimes called Average Revenue Per User (ARPU) or Average Revenue Per Customer (ARPC).
Rule 50 of the Olympic Charter provides a framework to protect the neutrality of sport and the Olympic Games. It states that, “No kind of demonstration or political, religious or racial propaganda is permitted in any Olympic. sites, venues or other areas.” Why does this rule exist and what does it aim to achieve?
The EBITDA margin calculated using this equation shows the cash profit a business makes in a year. The margin can then be compared with another similar business in the same industry. An EBITDA margin of 10% or more is considered good.
The difference between the EBITDA profit margin and standard profit margins is simply a matter of its exclusion from the GAAP principles. The EBITDA is still a profit margin, but prudent corporate and stock valuation includes analysis of this metric in addition to the GAAP margins rather than instead of them.
To calculate SaaS valuation, investors take into consideration several metrics, including ARR, income, SDE-based valuation, EBITDA-based valuation, growth rate, NRR, gross margin, profit margins, revenue and revenue retention, etc.
SaaS company growth rate depends much on a company development stage. On average, the revenue increase falls into the 15% to 45% year-to-year growth range.
A hearing protector with an NRR below 20 will in general protect less than a device with an NRR in the 20's. A device with an NRR in the high 20's or low 30's will generally offer the most protection you can buy.
What is MRR? MRR stands for Monthly Recurring Revenue. It is the monthly value of the recurring elements of your contract.. It will typically exclude one-time and variable fees, but for month-to-month businesses, it could include such items.
Introduction: My name is Fr. Dewey Fisher, I am a powerful, open, faithful, combative, spotless, faithful, fair person who loves writing and wants to share my knowledge and understanding with you.
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