The Nordic Software as A Service (SaaS) market is projected to witness a compounded annual growth rate of 13.43% to grow to US$8,202.463 million by 2027, from US$3,394.561 million in 2020. Software as a service is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software. The rapid adoption of software as a service (SaaS) solutions among the businesses in recent years, can be inferred from the fact that the construction of data centres in the Nordic countries has seen a significant increase in the past couple of years. For instance, Microsoft Corporation has opened its first data centre in Sweden in partnership with local utility provider Vattenfall to power its facilities with 100% renewable energy.
Moreover, the prevalence of an ideal business environment is leading to rising number of start-ups across the Nordic countries, despite the scenario of per-capita expenditure by the government on its citizens being high. Furthermore, the IT expenditure by different industry verticals in order to remain competitive in the global market is increasing steadily, thus, providing further revenue generation opportunities for the SaaS providers. For Example, in March 2021, Swedish tech success Regily launched Checkin.com. The company's unique SaaS offering makes them the world-leading supplier within check-ins, a position which is now further enforced with the launch of Checkin.com. Additionally, the growing adoption of cloud-based services across the Nordic countries is projected to drive market growth in the coming years. The demand for cloud services is expected to grow in near future with immense demand from IT and telecommunication industry of the country. Various giant players in the market are launching their services across Nordic countries which is projected to have a positive impact on the overall market growth. For instance, Amazon Web Services (AWS) has announced the launch of its new cloud computing infrastructure region in Stockholm. Oracle has announced the opening of its cloud region in Stockholm which will have a positive impact on the overall market growth.
Use of cloud-based services across Nordic countries
One of the prime reasons which are supporting the growth of the market is the growing use of cloud-based services across the Nordic countries. Organizations across the region are adopting cloud computing which they are implementing IT services that can analyze all executions, applications, and network connections. Many enterprises in the Nordic countries have begun to adopt newer methods and processes which has increased the adoption of emerging technologies, like AI, IoT, machine learning (ML) and many more. This transformation is expected to drive the growth of IT services in the region which in turn is anticipated to drive the growth of the overall market during the forecast period. Furthermore, demand for cloud-based services is rapidly increasing across Nordic countries such as Sweden. For instance, a recent article published by Swedish Pension Agency concluded the most widely used cloud services among public authorities in Sweden and found that IaaS was used by 30%, SaaS by 78% and PaaS by 23% which led to a conclusion that SaaS is the most common cloud service used by Swedish authorities. Recently, during the past few years, Sweden has also seen an increase in the number of SaaS providers due to the increasing e-commerce services, fintech development and general digitalization.
By end-user industry, the Nordic software as a service (SaaS) market is segmented as BFSI, communication and technology, retail, media and entertainment, government, education, and others.
Software as a service in the banking sector is appealed due to the lower investment costs as it does not require the same hardware infrastructure as that of a traditional banking software suite, which is expected to be one of the driving factors for the growth of the market during the forecast period. A bank’s software application is crucial for the success of the business, especially in the Nordic region which is the hub of one of the largest clusters of tech companies in Europe and whose capital is second only to Silicon Valley when it comes to the number of “unicorns” (billion-dollar tech companies) that it produces per capita. Expanding banking sector is expected to be the prime driver for the growth of the software as a service market for the segment in the coming years. Furthermore, with increasing internet penetration and usage of smartphones, banking software services gave rise to a significant level. According to the World Bank, the proportion of the population using the internet increased from 89.651% in 2016 to 94.493% in 2019. The Nordic software as a service (SaaS) market for BFSI is predicted to increase as a result of significant investments in the sector. For instance, Wellstreet, a Swedish venture capital firm, announced the establishment of a new fintech investment, with a target fund size of US$40 million. The money will go to initial B2B and infrastructure software tech startups that will help the banking and fintech ecosystems. The company first raised an amount of US$20 million in 2020.
Tink is a Sweden-based start that provides SaaS service to the BFSI sector. The company aggregates numerous banks and financial services via API which can be accessed through new channels. The company successfully raised US$103 million in December 2020 to expand its operations. The firms collaborated with 3,400 banks across the country and have 250 million active users. The company also ventured with other SaaS service providers including NatWest, PayPal, AMRO, and SEB. Promising growth in the industry has resulted in increased investment in the company. In November 2021, Knowit and Mambu collaborated to create a SaaS core banking platform that will enter the Nordics market. The platform will provide comprehensive banking and financial services, allowing Dploy and Mambu to establish themselves as regional leaders in financial technology and improve user experiences. In December 2020, Larsen & Toubro Infotech, a technology consulting firm, collaborated with Temenos, a banking software firm, to launch the Digital Banking Platform in the Nordic region, which is driven by Temenos technology and designed to update traditional core banking systems. Financial organizations can use the platform to become more flexible and banks can use it to deploy new products more quickly.
The COVID-19 pandemic had a positive impact on the Software as a Service market. With the rise in the number of COVID-19 cases in the region, the governments had begun to impose lockdowns and travel bans. This had led to an increase in the adoption of cloud-based SaaS services. Since, the beginning of the pandemic, working from home had been gaining prominent traction in the region. Several official surveys had been conducted in the region that stated that working from home had enhanced over time. A significant number of participants had stated that there had been more benefits to working from home. The majority of the respondents in the region had been wanting a flexible way of working, according to the report submitted to the European Union. The adoption of SaaS in the region had been surging, even before the pandemic. According to Cloud Capital, one of the key players in the market, the participants in the company’s survey showed significant revenue growth and showcased their strength in the SaaS model.
|Market size value in 2020||US$3,394.561 million|
|Market size value in 2027||US$8,202.463 million|
|Growth Rate||CAGR of 13.43% from 2020 to 2027|
|Forecast Unit (Value)||USD Million|
|Segments covered||Deployment Model, Enterprise Size, End-user Industry, And Geography|
|Regions covered||Norway, Sweden, Denmark, Finland|
|Companies covered||Interoute Communications Limited, ELASTX, Fujitsu, IBM, Salesforce, Inc., Amazon Web Services, Inc.|
|Customization scope||Free report customization with purchase|
1.1. Market Overview
1.2. Covid-19 Scenario
1.3. Market Defination
1.4. Market Segmentation
2. RESEARCH METHODOLOGY
2.1. Research Data
3. EXECUTIVE SUMMARY
3.1. Research Highlights
4. MARKET DYNAMICS
4.1. Market Drivers
4.2. Market Restraints
4.3. Porters Five Forces Analysis
4.3.1. Bargaining Power of Producers
4.3.2. Bragaining Power of Consumers
4.3.3. Threat of Substitutes
4.3.4. Threat of New Entrants
4.3.5. Competitive Rivarly in Industry
4.4. Industry Value Chain Analysis
5. NORDIC SOFTWARE AS A SERVICE (SAAS) MARKET ANALYSIS, BY DEPLOYMENT MODEL
6. NORDIC SOFTWARE AS A SERVICE (SAAS) MARKET FORECAST BY ENTERPRISE SIZE
7. NORDIC SOFTWARE AS A SERVICE (SAAS) MARKET FORECAST BY END-USER INDUSTRY
7.3. Communication and Technology
7.5. Media and Entertainment
8. NORDIC SOFTWARE AS A SERVICE (SAAS) MARKET FORECAST BY GEOGRAPHY
9. COMPETITIVE ENVIRONMENT AND ANALYSIS
9.1. Major Players and Strategy Analysis
9.2. Emerging Players and Market Lucrativeness
9.3. Mergers, Acquisitions, Agreements, and Collaborations
9.4. Vendor Competitiveness Matrix
10. COMPANY PROFILES
10.1. Interoute Communications Limited
10.5. Salesforce, Inc.
10.6. Amazon Web Services, Inc.
Interoute Communications Limited
Amazon Web Services, Inc.
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