Japan Software-as-a-Service (SaaS) Market

Japan Software-as-a-Service (SaaS) Market Highlights

The Japan Software-as-a-Service (SaaS) market is expected to cross a value of USD 17.17 billion by the end of 2032. The market was valued at USD 7.5 billion in 2023 and is expected to expand at a CAGR of 10.5% between 2024-2032.

• Over the mid-term, the growing digital transformation initiatives in Japan is the primary factor anticipated to drive the Japan software-as-a-service (SaaS) market.
• The greater reliance on on-premises solution is a major factor to challenge the market growth.

Japan Software-as-a-Service (SaaS) Market Outlook

A software distribution model where software is hosted centrally in the cloud and is made available to users over the internet on a subscription basis is known as software-as-a-service (SaaS).

According to our experts at KD Market Insights, one of the major factors anticipated to drive the growth of the Japan software-as-a-service (SaaS) market is the growing digital transformation initiatives in Japan. The Japanese government is working proactively in adopting digital transformation initiatives to modernize operations, improve efficiency, and enhance competitiveness. Our researchers have found that Japan ranked 4th in the Cloud Readiness Index (CRI) and the top country for SME cloud investments. Microsoft Corporation, Alphabet Inc., and IBM are some of the significant parties in the market for Japan software-as-a-service (SaaS).

Japan Software-as-a-Service (SaaS) Market Drivers – Analyst’s Observation

According to the analysts at KD Market Insights, some key growth drivers for the Japan software-as-a-service (SaaS) market are:

• Growing Demand for Cloud Services: Japan has been witnessing an increase in adoption of cloud computing services. The business organizations in Japan are looking forward to reduce their IT infrastructure costs without compromising on their performance. By adopting cloud computing services, such as SaaS, businesses in the nation can enhance their flexibility and also enable remote work capabilities. These technologies also allow businesses to have greater accessibility and scalability, in addition to cost advantages, which in turn, makes these IT solutions lucrative to these businesses in the nation.
• Increasing Shift Towards Society 5.0: Japan is working progressively to shift towards Society 5.0, a concept which is more beneficial than Industry 5.0. By shifting to this concept, businesses in the nation require solutions that can help them to streamline workflows, maintain productivity, and collaborate effectively. As SaaS offers industry-specific solutions tailored to the unique needs and regulatory requirements of various sectors, these advanced tools are rapidly being adopted by businesses to address their specific pain points, compliance requirements, and workflow challenges. Such a factor is therefore expected to drive the market growth forward during the forecast period.

Which Probable Factors Could Hamper the Growing Japan Software-as-a-Service (SaaS) Market Trend?

As per our KD Market Insights analysis, some of the challenges expected to limit the market growth of Japan software-as-a-service (SaaS) are:

• Greater Reliance on On-Premises Solutions: The SaaS business model works over the cloud. As a result, there are concerns pertaining to data security, compliance and control. Japan, as a nation, has a cultural preference for on-premises software solutions to mitigate such threats that are associated with adopting cloud software solutions, which is expected to limit the adoption of SaaS in the nation.
• Stringent Regulatory and Compliance Challenges in Japan: Japan has set stringent regulations for protecting its data. The Act on the Protection of Personal Information (APPI) is one such regulation that governs the handling and transfer of personal data. Owing to such regulations, it becomes challenging for businesses to adopt SaaS solutions, and also creates challenges for SaaS service providers to stick to these regulations.

How is the Japan Software-as-a-Service (SaaS) Market Segmented?

Our experts at KD Market Insights have segmented the Japan software-as-a-service (SaaS) market as:

Which Key Players Top the Japan Software-as-a-Service (SaaS) Market Share?

As per our analysts at KD Market Insights, the competitive landscape of Japan software-as-a-service (SaaS)market facilitates our readers in identifying their closest competitors. The manufacturers who are associated with Japan software-as-a-service (SaaS)market are raising their focus on expanding their presence, as well as their market share. The market has also been witnessing an upward movement in the number of collaborations between research institutions and key players, aimed at introducing advanced technologies and innovation of new products. Here is a list of the key players who top the Japan software-as-a-service (SaaS) market share:

• Microsoft Corporation
• Alphabet Inc.
• IBM
• Hewlett Packard Enterprise Company
• Oracle
• Salesforce.com, Inc.
• Softbank Corp.
• Fujitsu

What are the Recent Developments Observed in the Japan Software-as-a-Service (SaaS) Market?

Over the years, the experts at KD Market Insights have been observing the recent developments associated with Japan software-as-a-service (SaaS) market trends. Our expert’s market forecast analysis has recorded the market players adopting plentiful of key strategies including new product launches, mergers & acquisitions, and collaborations.

For instance, Fujitsu Laboratories, Ltd. stated that it has developed a new ‘Content-Aware Computing’ technology. This technology is aimed to control accuracy in addition to increasing computing speeds.

Further, Oracle stated that along with Aconex Limited, it has signed an agreement to buy the latter’s shares. The set transaction value for this deal was worth USD 1.2 billion net of Aconex cash.