There are currently around 1,000 software-as-a-service (SaaS) businesses in Germany. While still a relatively new sector, it is currently in a period of dynamic growth. This article explains SaaS, the SaaS market in Germany, and its prospects for growth. We also discuss SaaS pricing models and current trends in the German SaaS market.

What’s in this article?

• What is SaaS?
  
• How big is the SaaS market in Germany?
  
• What pricing models does the SaaS sector use?
  
• What are the current trends in the German SaaS market?
  
• What are the growth prospects for the SaaS market in Germany?
  
• How Stripe Billing can help
  

What is SaaS?

SaaS stands for “software-as-a-service.” It refers to a business model where businesses access software via the internet as a service, rather than purchasing and installing it on their own servers. Businesses subscribe to the software they want to use and access it via a browser. Typical SaaS applications include bookkeeping software, customer relationship management (CRM) systems, and human resources (HR) or project management tools.

There are several benefits for German businesses that use SaaS:

• Cost transparency: Instead of high one-off investments, businesses pay for what they use or take out a subscription.
  
• Flexibility: Licenses can be canceled and scaled quickly, allowing SaaS businesses in Germany to react to market fluctuations and growth opportunities whenever they happen.
  
• Freedom to roam: SaaS is ideal for hybrid models of working because employees can access the software wherever they are.
  
• Zero maintenance: The provider handles updates, backups, and security measures, such as encryption, access controls, and regular vulnerability scans.
  

How big is the SaaS market in Germany?

The SaaS market in Germany has grown to become one of the core drivers of digital transformation. Businesses in every industry are increasingly turning to cloud-based software solutions. This trend is reflected in current usage figures and market data.

In 2024, 81% of German businesses used cloud computing, while a further 14% discussed or planned to use it. Around 61% wanted to use the cloud to transition to platforms and SaaS—up 4% from 2023.

The German software industry recorded revenue of around €28.4 billion in 2024, a significant portion of which was generated by SaaS solutions. Revenue from SaaS is currently forecast to hit around $19.5 billion USD in Germany in 2025. Globally, the SaaS market already surpassed $266 billion USD in 2024, generated by a total of around 30,800 SaaS businesses.

In Germany, the majority of market players are medium-sized enterprises. Nearly half of all B2B SaaS businesses—43.3%—have between 11–50 employees, while roughly a quarter have between 50–200 employees. More than half of all active providers were set up between 2015–2020.

What pricing models does the SaaS sector use?

When it comes to charging customers for their software, SaaS businesses apply a range of different pricing models. These models vary according to the type of product, target group, and company business model. Here are some of the most relevant pricing models:

Pay-per-seat

Charging according to the number of users (i.e., seats) is one of the most popular SaaS pricing models. Businesses pay a fixed amount per active user account, regardless of how much they use the software. This model is best suited for tools that use individual accounts, such as project management, CRM, or collaboration tools.

The major benefit of this model is its flexibility. Acquiring new licenses for a growing team is a speedy process. However, with a large number of users, the total costs can add up fast.

Tiered pricing

Tiered pricing usually breaks down a business’s services into different packages, such as “Basic,” “Pro,” and “Enterprise.” These packages offer differing functionalities, user numbers, or service levels. Tiered pricing lets SaaS providers offer an affordable entry point for smaller businesses and a premium option for larger organizations with more complex needs.

Pay-per-use

With a pay-per-use model, the price is determined by how much the software is actually used. This could be measured by application programming interface (API) calls, storage used, transaction volumes, active sessions, and more. This model is best for technology or infrastructure SaaS products, such as cloud services, payment providers, or analysis platforms. For businesses with irregular use, it offers maximum flexibility. However, it also requires them to closely monitor costs.

Flat rate

With a flat rate, businesses pay a fixed price, regardless of the number of users or intensity of usage. This model is ideal for products that have a simple structure and consistent level of service. While it offers both sides predictability, it can have drawbacks for providers, such as individual customers creating an above-average load on the system.

Freemium model

Many SaaS companies offer a free basic version with limited capabilities. Users can access additional features by upgrading to paid versions. The freemium model is great for attracting users because potential customers can test out the product risk-free. The challenge for providers lies in creating sufficient added value in their paid product that will motivate customers to upgrade.

Individual pricing

For large businesses with special requirements, many SaaS providers offer customized contracts. Here, prices can be negotiated individually and tied to factors such as user numbers, scope of functionality, integrations, and support services. While this model requires more effort on sales and marketing, it offers maximum flexibility for both sides.

Choosing the right pricing model is a competitive factor for SaaS businesses in Germany, affecting growth in revenue, customer loyalty, flexibility, and market position. Currently, many businesses combine multiple models to accommodate different customer segments.

What are the current trends in the German SaaS market?

The German SaaS market is growing rapidly, driven by tech innovations, rising acceptance of the cloud, and changes in customer behavior. Here are five key trends driving the growth of SaaS businesses in Germany right now:

Artificial intelligence (AI) integration

AI is increasingly becoming a standard component of modern SaaS solutions. Integrated AI features help automate workflows, analyze large volumes of data, and personalize the customer journey. From automated controlling analyses to intelligent text suggestions in CRM, AI-assisted capabilities can increase efficiency and added value.

Specialized industry solutions

Previously, many SaaS businesses would develop horizontal solutions for broad groups of users. Now, however, there is a trend toward vertical SaaS platforms that are specialized for specific sectors or industries. These solutions target industry-specific processes, regulations, and workflows, producing services tailored to the construction industry, health care, retail, and more.

No-code and low-code solutions

SaaS businesses are increasingly capitalizing on self-serve portals and no-code or low-code offerings. No-code solutions allow users with no programming knowledge to adapt capabilities, while low-code solutions require minimal technical knowledge. With these solutions, users can design workflows, dashboards, or automations, giving them more control over applications, faster results, and lower costs.

Internationalization and consolidation

A lot of SaaS startups in Germany have an international outlook. They employ flexible business models with a clear go-to-market strategy for the EU or global market. At the same time, the SaaS sector is becoming increasingly consolidated, with successful companies buying up smaller competitors or merging to use synergies and strengthen their market positions.

Sustainability

Sustainability is an increasingly important issue, including in the SaaS market. Businesses are paying much closer attention to their information technology (IT) infrastructures’ carbon footprints, responding with more efficient server centers, ecofriendly software development, and environmental reporting functions. “Green SaaS” is becoming a selling point, especially in the public sector and for larger medium-sized enterprises with environmental, social, and governance (ESG) strategies.

What are the growth prospects for the SaaS market in Germany?

The German market for SaaS is growing at pace. With digitization progressing across nearly every sector of the economy, it’s a trend that is likely to continue. Market volume in Germany is predicted to top $36.68 billion USD by 2030. That’s a compound annual growth rate (CAGR) of 13.35% between 2025–2030.

A quick look at the global market underlines this trend. Globally, SaaS market volume in 2025 is estimated at around $316 billion USD and is set to exceed $1.1 trillion USD by 2032. That’s a global growth rate of 20% per year on average. With revenue forecast to reach around $237 billion USD by 2032, the US remains the biggest single market.

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