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United Kingdom SaaS Market

SaaS is one of the UK largest ICT markets, with the vast majority of enterprises realizing the value of investing in newer ICT segments to accelerate their productivity and growth.

  • $240bn digital tech turnover in 2018
  • About 100,000 software companies in market
  • Second largest ICT markets in ranking of ICT spending per head (U.S. #1)
  • London second most connected place for tech, right after Silicon Valley
  • No. 1 top scaling tech nation in Europe
  • No. 1 destination for U.S. ICT businesses in Europe (often serving as EMEA HQ)
  • Despite Brexit uncertainty, attracted over $12bn venture capital investment in 2019 more than any other European country (more than France and Germany combined)   

While all the big enterprises in the UK have already implemented adequate tech tools for a while now, small and medium sized enterprises have also started to direct their attention towards the right digital tools to optimize their processes.

The rising tide of software as a service has created an industry of products and services that require subscription-like recurring payments and the mindset of UK customers has also shifted from one-off customers with a one-time purchase, to active, recurrent customers that adopt a recurring purchase routine.
Additionally the vast majority of UK enterprises rely on mobile connectivity of its workforce, which is an ideal setting for SaaS providers continuing to develop their solutions for usage on tablets and smart phones, in order to keep pace with this growing demand.

Best prospects for SaaS companies in the UK are focused around: Artificial Intelligence, Robotics, Cybersecurity, Internet of Things, Virtual Reality and Augmented Reality, Fintech and e-Health.

Key issues to consider for SaaS expansion in the UK include:

  • Brand awareness: get to know key stakeholders; presence on the ground, direct employees or partners, essential
  • Partner with well known and respected names
  • Be aware of the competition
  • Provision of interoperable, secure, flexible solutions. Getting secure, future-proofed products is a top priority. In the rapidly changing digital environment, customers are attaching greater importance to flexibility offered to incorporate future elements; and
  • In light of the current COVID-19 pandemic, it is important to note that the vast majority of ICT organizations are presently focusing on existing clients, recognizing the difficulty of securing new business in the current situation.

With regard to channel partners, at the right time – when a company has established product-market fit, have their sales and marketing cycles sorted and have started making money – a partner program can be a great asset. For SaaS the traditional VAR is probably not the bets model. The real opportunities are in understanding who the end-customer is, who they trust, and giving tools to everyone that sits between the vendor and the end-customer so that all involved can add, and extract, value. If there is a third party involved at the “technology level”, they aren’t a traditional VAR; likely they’re an integrator.

For more information contact Claudia.Colombo@trade.gov 

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