Procurement complexity sees PaaS take-up rates rocket

Procurement-as-a-Service 2023 global market is worth around US$7.1bn, report shows, with strong growth also predicted, as complexity and tech drive growth

The procurement as a service (PaaS) market is seeing massive growth, a report from a top research company shows.

The report, from Future Market Insights (FMI) shows that the 2023 global market is worth approximately US$7.1bn, and is projected to grow at an annual growth rate of 7.5%. 

Cloud-based PaaS involves outsourcing procurement processes to third-party service providers, offering benefits such as cost reduction and increased efficiency. Other services include:

  • Strategic sourcing
  • Supplier management
  • Contract management
  • Invoice processing

PaaS growing due to procurement complexity 

FMI says the rising popularity of PaaS can be attributed to “the focus on cost optimisation, operational efficiency, and the complexities of managing procurement in-house”.

Tech advancements – including AI, machine learning and robotic process automation – are all enhancing the capabilities of PaaS solutions. 

The demand for efficient procurement solutions is also increasing across industries, driven by digital transformation and cloud-based solutions.

The FMI report shows Europe holds a a 21.4% share of the PaaS market, because the region has strong economies and high adoption rates of digital solutions. 

Europe's cloud infrastructure is also mature, and “has an emphasis on data security, and privacy regulations contribute to the growing adoption of PaaS among businesses”, the report says.

India, meanwhile, experienced significant growth (11.2%). The country's fast-growing economy, globalisation, and integration into the global supply chain is driving digital technologies, including PaaS. 

The FMI report echoes a similar report late last year, from ReportOcean, which predicted the global PaaS market will reach US$10.04bn by 2027.

Another recent SaaS report suggests that China is seeing a faster SaaS growth rate than any other country, with it forecast to grow at 8.4% a year, taking its PaaS market to US$1.7bn by 2027.

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