How AI Is Shaping the Future of SaaS Markets Globally

Each fall, I look forward to what I call my “World Tour” in the EMEA and APAC regions, where I get to spend time with G2 employees, partners, customers, and other SaaS leaders and entrepreneurs.

My travels brought me to Dublin for SaaStock , a four-day event with over 4,500 attendees consisting of SaaS founders, operators, and investors. I also traveled to Bangalore, India, where not only did we celebrate a new office opening and our internal Midyear Meetup, but also hosted our G2 Live event with SaaS leaders, customers, and partners in the region.

Reflecting on my travels, I continue to be optimistic about the growth of SaaS globally. We see this trend validated by our G2 marketplace too. While approximately 75% of G2 Leaders are based in the Americas today, about 15% derive from countries in EMEA, and 10% come from the APAC region. As buyers are becoming region-agnostic, they are looking for best-of-breed software built by entrepreneurs anywhere in the world.

EMEA SaaS leaders win with AI and satisfied customers 

As we think about the state of the EMEA SaaS market, Accel’s annual Euroscape report offers an interesting perspective. This year’s edition, titled "AI Eating Software,” explores the major European SaaS trends and vendors to watch. Notably, it recognizes and analyzes the top 100 EU and Israel AI/Cloud companies valued at less than $1 billion. 

Despite slower growth observed from these companies, generative AI is a bright spot — fueling momentum and funding activity. It’s also worth noting that the Euroscape winners continue to consistently earn higher G2 scores than other European vendors, underscoring the importance of customer satisfaction in rising above the competition. 

Accel's Euroscape report

APAC's growth opportunity in an age of AI

Indian SaaS products have been forecasted to claim an 8% share globally as the country’s SaaS market is set to grow to $37 billion by 2028. At the same time, Bessemer Venture Partners predicts the India SaaS market will generate 3x as much revenue by 2030 as it does today, driven by the rapid acceleration of AI. 

While AI is spurring growth globally, we see even greater adoption in APAC. According to survey findings for our 2024 Buyer Behavior Report, 63% of APAC software buyers said their organization has purchased an AI platform in the past 3 months (as of March 2024), compared to 53% in both EMEA and North America. This percentage climbs to 75%for India-based respondents. 

Producing over 2.5 million STEM graduates every year (more than 3x the U.S.), India provides deep talent in crucial and growing fields like data science and. At G2, we’ve benefitted from the local talent. Opening our APAC headquarters in the burgeoning tech hub of Bengaluru, India in 2019, the team has thrived – growing to over 160 employees. This growing tech talent pool will become even more valuable in an age of AI.

Sara Rossio, Priti Patel, Chad Gold, Sharath Jagadish, Eric Gilpin, Godard Abel, and Shreyans Dugar in the Bengaluru office.

SaaS vendors' path forward

While the EMEA and APAC markets have their unique differences, I observed similar challenges, opportunities, and trends. From my conversations with other SaaS leaders in these regions, the following three key themes stood out:

• AI innovations are eating SaaS. Startups and market leaders alike are leaning on new AI products and features to speed up their own innovations and processes. It’s clear that AI is here to stay and any SaaS vendor not leaning into it risks being left behind. 
• It’s harder than ever for vendors to break through the noise in the global SaaS market. Based on G2 research, buyers now want it all and have leverage as they consolidate SaaS stacks and spend. The desire for more compound apps, AI innovation, and more flexible usage-based pricing models has lengthened sales cycles and shortened short lists.
• SaaS companies must adapt their go-to-market strategies to meet higher buyer expectations for ROI. As a result, sales and marketing teams are pivoting their messaging to be more efficient, while leveraging data and intent signals to reach the right buyers, at the right time, with the right messaging.

The global SaaS marketplace continues to expand, with our own G2 marketplace experiencing more than 10% growth over the past year. What’s fueling this growth? AI, of course. We continue to observe an explosion of AI categories, vendors, products, and features – with our AI software category adding  nearly 800 products over the past year!

And while we’re still in a period of economic uncertainty and slower growth rates, SaaS vendors have a promising outlook – if they can meet buyers' needs for AI-powered solutions that deliver fast ROI.