The Growing SaaS Market in Japan: Opportunities and Trends
Software-as-a-Service (SaaS) has been a buzzword in the tech industry for a long time now, and Japan is no stranger to this trend. Japan has always been a pioneer in technological advancements, and the SaaS market in Japan is rapidly growing. In this blog article, we will take a brief look at the total addressable market (TAM) of the SaaS market in Japan and what kind of growth can be expected over the next five years.
What is SaaS?
SaaS is a software delivery model in which software is provided over the internet and users pay a subscription fee to access it. SaaS has been gaining immense popularity among businesses worldwide as it allows companies to access powerful software at scale without the need to invest in costly hardware or infrastructure.
TAM of the SaaS Market in Japan
According to research by Statista, the SaaS market in Japan was valued at $8.7 billion in 2024 and is expected to grow to $12.7 billion by 2027, at an annual growth rate of 10% during the forecast period. The growth of the SaaS market in Japan is mainly driven by the increasing adoption of cloud-based solutions by businesses across various sectors in Japan, including healthcare, education, finance, and retail.
Factors Driving the Growth of the SaaS Market in Japan
1. Increasing Adoption of Cloud-Based Solutions
The adoption of cloud-based solutions in Japan has been increasing steadily over the past few years, and this trend is expected to continue over the next few years. Companies in Japan are realizing the benefits of cloud-based solutions, including reduced costs, increased scalability, and improved flexibility.
2. Rising Demand for Digital Transformation
Digital transformation is a key priority for companies in Japan as they strive to stay competitive in the global marketplace. SaaS is a crucial component of digital transformation initiatives, as it allows companies to access powerful software without the need to invest in costly hardware or infrastructure.
3. Growing Awareness of the Benefits of SaaS
The awareness of the benefits of SaaS is growing in Japan as companies realize that it can help them reduce costs, improve efficiency, and stay competitive. As more companies adopt SaaS solutions, the market is expected to grow rapidly over the next few years.
4. Government Initiatives
The Japanese government is also playing a significant role in driving the growth of the SaaS market in the country. The government has launched various initiatives to promote the adoption of cloud-based solutions and support the growth of the SaaS market.
5. Growth of the SaaS Market in Asia
For the Asia-Pacific region, according to a report by MarketsandMarkets, the regional market was expected to have grown by as much as 41% annually between 2008 and 2015. Much of this growth would have been attributed to smaller businesses opting for the SaaS model as a cost-effective alternative to traditional software buying, in addition to the benefits of cloud-based solutions, and a rising demand for digital transformation across the region.
Conclusion
The SaaS market in Japan is rapidly growing and is expected to continue this growth trajectory over the next few years. The increasing adoption of cloud-based solutions, rising demand for digital transformation, growing awareness of the benefits of SaaS, and government initiatives to promote the adoption of cloud-based solutions are some of the key factors driving the growth of the SaaS market in Japan. As the SaaS market in Asia continues to grow, it presents a massive opportunity for businesses looking to invest in this industry.
Get in touch with us today to learn more about the opportunities for market entry in Japan and how we can help. Litmus specializes in providing marketing, consulting, and localization services tailored for the Japanese market.
Disclosure: This article was written with assistance from AI tools.
