Over the years, the technology world has witnessed some landmark innovations and new technologies have emerged seeking to change the way the industry operates. One of these new technologies is SaaS which means Software as a Service. This new system is now used in different spheres; business, entertainment, education, finance, and many others, so much that there is a thriving SaaS industry.
Furthermore, indications show that the brewing SaaS industry is expected to explore new frontiers and break into new spaces. This article will focus on the exploits and expectations of the SaaS industry in the nearest future.
We will discuss the new frontiers that the industry is expected to break into and also discuss ways through which businesses, corporations, and individuals can take advantage of these new explorations.
The SaaS Concept
SaaS is one of the cloud computing services that focus on software distribution. It makes pieces of software available over the internet, thereby proving impressive functionality, agility, and prudence to businesses.
It also offers security coupled with simplicity, wide coverage and connectivity, and user accessibility. These features make the software as a service approach perfect for many small, medium, and large businesses. Many businesses use the approach to streamline their operations and have enjoyed maximum efficiency with their operations and deliverables.
It is no longer news that many businesses have turned to the Software as a Service solution to provide value to their customers while keeping running and operational costs at the barest minimum. The features of the service that enticed small, medium, and large businesses include the versatility, accessibility, and functionality it provides businesses.
Thanks to this concept, companies can now run online data analysis and operate pieces of software without having to install physical data centers or install applications on their computers.
Reports show that the SaaS industry is currently leading the cloud computing business and is poised to continue leading. Gartner reports in one of its researches that the SaaS sector will be worth a whopping 144 billion US Dollars in the years 2022. This is an explosive growth and businesses should be ready to take advantage of this growth to scale up their offerings.
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The Key Features of the SaaS Concept
People must understand that SaaS is not only technological innovation but also an effective business model. The following features of the SaaS concept will prove this position;
#1 Ability to Scale Operations
One of the foremost requirements of businesses nowadays is scalability, which refers to the ability of businesses to adjust their offerings to meet the demands of their customers. SaaS provides this ability by providing a lot of features and options to businesses. Thus, depending on what their customers want, these businesses can select the features they need and get on with business. The moment these needs increase or decrease, they can also acquire or drop more features to meet up the demand.
#2 Flexibility with Regards to Finances
SaaS provides a flexible payment option and financing methods for businesses. With the SaaS concept, businesses need not worry about buying hardware and software to start with. All they need to do is approach a SaaS provider to curate a suitable solution for their business.
The best thing about the approach is that you only get to pay for the resources you use. So if your business is still growing and you don’t need a lot of servers and other resources, you only get to pay a meager amount of money
#3 Easy to Access
Another advantage that SaaS tools confer on businesses is easy accessibility. It makes it easy for users to access the software with any digital device from any location in the world. The tools are especially easy for mobile devices to access adding to their user-friendliness and ease of use.
#4 Always Secure
The security apparatus used for most SaaS tools is known as enterprise-level security. This type of security arrangement is more holistic and works better in the event of a security breach than centralized solutions.
In this type of security arrangement, there are pre-existing data protocols. What this means is that even before any occurrence of a security breach, there are protocols that would help preserve your business data in place. So when the security breach eventually occurs, you know that your data is safe and secured.
#5 Promotes Team Collaboration
Due to its simplified data and file sharing features, SaaS tools makes eases collaboration between teams and businesses alike. The tools also make it easier for teams and departments to read and understand files and data shared.
#6 Upgrades and Updates
One of the features of a software application is the occasional updates that the software needs. When you use a physical data center, there is a sizable amount of resources that goes into updating and upgrading your software application.
But with SaaS tools, you need not worry about that. The SaaS providers handle the upgrades and updating of the software application.
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Myths about SaaS
There are some myths around the SaaS concept that need to be dispelled. Some of these myths include;
#1 SaaS is not as secure as having physical data centers
Indeed, some of the initial problems faced by the cloud computing world emanate from the fact that the online data centers used by SaaS products and other services are managed by third-party vendors and could lead to a possible security issue. However, the actual occurrence of this security is rare and has not been recorded by any SaaS product. There have not been any major security compromises of any SaaS product to date.
#2 You Only Get One Application with SaaS
This is another myth that you should get out of your mind. You can get as many applications or tools from SaaS as you want or need. From email marketing tools to dashboards and music playing tools, there are lots of tools available in the SaaS industry, each of them existing in different shapes and forms.
#3 Tech Professionals are Against the Growth of SaaS Industry
While it is true that many professionals in the tech world had a tough time embracing the concept when it started, SaaS is now the darling of the industry, as almost every sector of the industry has adopted it. The problem the concept faced at its inception is normal for all disruptive technologies trying to change the way things are done. But once professionals saw the light, they followed it through and are still riding on the wave of popularity of the concept.
>>More: Definition, Best Practices, and Best Tools for SaaS Monitoring
SaaS Industry Trends and Exploits
Over the last few years, the SaaS industry has seen an impressive adoption rate. The approach was also introduced into many new sectors and industries making it more popular. Projections have shown that the industry will take on new trends over the next few years, thus assisting its adaptability into new sectors and industries.
These projections are backed by facts and figures released by popular research bodies in the tech and business world. Bloomberg predicts that the SaaS industry which includes public businesses, corporations, cloud platforms, and applications will experience a CAGR (Compound Annual Growth Rate) of 9% between 2019 and 2023, amounting to a total market size of $61 billion.
Another body, Betterbuys, projects that the total specific expenditure of the US SaaS industry alone will reach $55 billion by 2026. The report from Gartner also confirms these projections.
What all of these projections mean is that the world will see new trends and exploits by the SaaS industry in the coming years. While many of these trends are already taking place, some are in the pipeline and there is no indication that some trends will occur.
Either way, we have identified ten of the new possible trends that the SaaS industry may set in the coming years. We will discuss some of these new trends in this section. The following are some of the new trends that the SaaS industry will take on in years to come;
#1 Artificial Intelligence
Given the fact that this particular innovation also took the world by storm, it will be surprising if the SaaS industry doesn’t even attempt to dabble into the AI sector. Artificial Intelligence is one of the top three innovations that disrupted the world last year and is poised to continue this trend. It is so powerful and disruptive that reports show a projection of $733 billion for the Artificial Intelligence industry by 2027.
What Artificial Intelligence does is simply automate recurring and repetitive tasks and processes. It learns human behavior and uses this knowledge to increase the efficiency and productivity of businesses while optimizing their processes.
When used in the business world, AI brings businesses, technology, and customers into a new circle with increased levels of interaction and responsiveness between the three parties.
Today, AI has found its way into the SaaS tools used by businesses. One of the popular ways through which artificial intelligence has been used is in the creation of a feature known as Data Alerts. Software developers build an algorithm that can recognize patterns. Once this algorithm notices an anomaly or occurrence that contradicts the existing pattern, it then signifies that something is wrong.
The use case for this type of feature is huge in SaaS tools used by businesses. The first example is for measuring pre-set goals. With this type of feature (or algorithm), business organizations can easily note the achievement of goals and targets set without actively tracking it.
Also, you can use this feature to note the occurrence of a problem in a system or function. The feature alerts you to the occurrence of the problem allowing you to have firm and balanced control over your business operation.
This feature is popularly used when a business has lots of KPIs to track and measure. With this feature embedded in an online reporting tool, you can keep track of any changes or fluctuations without losing sight of important tasks and processes.
This feature is one of the numerous ways through which artificial intelligence seeks to disrupt and improve many features and functions of SaaS tools. It goes then without saying that the combination of AI with SaaS tools is very beneficial to the industry as well as businesses using the SaaS concept. Businesses will get to enjoy functions such as automation and personalization of services, optimize the data processing operation to provide better value for data, increasing the security of data, and supplementing human capability.
Automation and Personalization of Services
One of the features of artificial technology is Natural Language Processing (NLP) which automates the processing of human speech and enhances voice control. With the introduction of this feature into the customer support system of your SaaS tools, it is likely to enhance operations and help you attend to clients better.
Data Security
With the ability of many artificial intelligence features to recognize patterns and automate processes, using an AI-powered feature for the security of your SaaS tool tends to make it safer and secure.
Speed
You also get to enjoy fast internal processes which lead to quicker operations such as fast forecasts and a higher rate of responsiveness when you use AI features with SaaS tools. This is a result of automated processes.
#2 Centralized Analytics
Another trend that the SaaS industry is likely to take on in coming years has to do with data. As the rate of digital revolution among sectors and industries continues to increase, businesses within the sectors and industries are paying more attention to data and its ability to optimize their processes and provide more insights into their consumers’ behavior. As a result of this, we expect that many companies will invest in SaaS tools that allow for fast, efficient, and accurate data analytics.
Experts within the data analytics industry also project that SaaS tools that provide quality and centralized data analytics are expected to increase 2022 by 23.3%. The projection is that many SaaS companies will add data analytics to the core of their offerings and services, providing quality business intelligence services and allowing businesses to make decisions backed by data.
The reason why centralized data analytics is expected to be such a big deal in the SaaS industry is that it provides a holistic perspective into the data collected by businesses. This point of view helps teams discover subtle insights and inferences about the data, using newer features such as dashboards.
Performance dashboards, like other modern features, ensure that every member of the team has an access to the data at the same time. It also means that data can be pulled from any device or gadget at any time as long as it is connected to the centralized data analytics system.
All of these functionalities will be available and accessible to businesses with the combination of complex software capabilities and the cloud environment known with SaaS tools.
#3 Machine Learning
Machine Learning (ML) is a subset of Artificial Learning. It deals with the process of training the computer with data, intending to automate processes. In the business circle, it is used to automate operations and increase the rate at which the customer support system attends to customer inquiries.
The technology is the brainchild behind live chatbots that many businesses use to answer and attend to the questions posed by customers. It is also useful for the onboarding process in any SaaS tool.
Understanding that ML features are based on automated processes and seeing the results in places where these features have been used, it is only a matter of time before businesses start adopting these features to automate and speed up the certain internal process and utilize the feature for functions other than a customer support system.
By adding ML innovations into their offerings, SaaS tools tend to achieve a self-improving status, thereby providing an unprecedented level of operational efficiency and intelligence that ensures that businesses can serve their customers better and stay way ahead of the competition.
The relevance and adoption of machine learning are on the increase and as a result, are constantly a hot topic in the tech industry at the moment. If and when the combination of machine learning and Software as a service comes to fruition, these, among others, are some of the benefits that will exist for businesses and corporations within the SaaS industry;
- They will be able to train software with data from previous tasks and processes, allowing the software to attain a more enticing level of intelligence and operational efficiency during the process
- Businesses will be able to achieve rounded and deeper insights from data, gaining inferences that make the difference between competitors
- The model will also provide a more complex communication system that enhances collaborations and partnerships between team members and departments in the company
As an example, Netflix and Waymo are companies that are already using the combination of SaaS and machine learning to improve their efficiency. Machine learning is responsible for the personalized content suggestions that users get from Netflix and also the ability of Waymo’s automated cars to predict, to an enviable level of accuracy, the possible traffic jams and risk factors on a journey.
In the coming years, the world will see more of these applications.
#4 Vertical SaaS
Vertical SaaS simply refers to the ability of SaaS tools to target and work for specific industries and sectors. The aspect of SaaS that deals and serves every industry and sector is the Horizontal SaaS and it is the most popular for now.
Vertical SaaS is an emerging technology and one of the trends that we expect the SaaS industry to take on in the coming years. One of the appealing features of vertical SaaS is the fact that businesses can customize it to fit the needs of specific industries and the supply chain that they intend to serve.
Examples of Vertical SaaS tools include retail analytics software, healthcare analytics software, and advanced logistics models among others. Reports show that businesses that have opted for vertical SaaS tools in recent times have identified it as the perfect option for customization and specialization.
It is cost-effective and also allows businesses to adjust and customize certain features in the software to suit the specific and time-related needs of the industry they serve.
In the coming years, we expect an explosive adoption of vertical SaaS. This is because the SaaS model can scale and adjust based on specific client demands. It also solves the problem of client’s niche needs, resulting in better upselling and cross-selling opportunities without increasing the customer acquisition cost and dampening the flexibility enjoyed by the business.
The following are other benefits that businesses will enjoy from vertical SaaS models upon their full adoption;
Higher business value for software: When a product is made for a specific industry and meets the needs and requirements of that industry, its business value skyrockets. This is going to be the reality of software built on the vertical SaaS model. This is because this software will be designed to meet specific requirements and solve specific problems, their ability to solve these problems efficiently increases their business value.
Higher Customer Intelligence: Because the SaaS tools designed on the vertical SaaS model are meant for specific industries, they will collect only data important to those industries. Therefore, any insight or inferences made from those data will reflect the nature of the industries alone, helping businesses serve their customers better.
Better Data Governance Policy: With the position of vertical SaaS tools to include specific industry compliance capabilities to the data governance procedures, businesses can expect the resolution of issues bordering on data governance and also more transparency.
Streamlined and Pre-defined Metrics: Businesses will get an accurate reflection of their consumer behavior as they get to use streamlined KPIs and metrics to measure the performance and progress of their products and services.
Better Offerings and Higher Standards: Because all the efforts of businesses are tailored towards serving the industry and its consumers better, there will be an overall increase in the standard of service and products offered by businesses.
#5 SaaS White Labelling
Another type of SaaS that we will be seeing in the coming years is the white label SaaS. This type of SaaS entails the design and development of a platform for another company. To aid the understanding of this concept, let’s consider two companies; Company A and Company B.
Company A is a SaaS-based business that creates different types of software. Company A then creates a fully functional platform that has been tested and finalized. Company A sells this platform to company B who then customizes it to meet their taste and sells it under its company’s brand.
This type of arrangement is known as SaaS white labeling and is expected to be the rave of the industry in the coming years, especially with startups looking to avoid huge financial commitment and logistics problems before gaining a sizable amount of the market share. In other words, it is a way for startups to get down to business by focusing on their marketing strategy, creating a strong value proposition, and building a sustainable brand, rather than starting from scratch.
Startups can simply use BI dashboard software as a white-labeled SaaS solution, customize its features to meet its branding standards, and start businesses.
The company that creates the platform (Company A) also stands the chance to enjoy many benefits from this trend. They can increase their revenue by shipping out functional platforms for startups.
Increased Optimization of the Mobile Offerings
One of the high points of technology today is the mobile optimization that it affords us. We connect with people at any time of the day, regardless of our location geographically. This mobile optimization is also enjoyed in businesses and the corporate setting where employees and team members can effectively perform their tasks and operations from their phones and tablets using dynamic mobile dashboards and interfaces.
In the coming years, we expect to see more mobile-based SaaS solutions. The emergence of the coronavirus pandemic contributed immensely to the development of this aspect of SaaS. In the coming years, there will be increased adoption of a mobile-first mentality concerning SaaS products.
This is because the need for mobile-based tools is also increasing. There is a huge likelihood that businesses will not only make mobile optimization reporting products their priorities, there will also ensure that their designs work perfectly for a diverse mobile population which includes the visibly and audibly impaired, the neurodiverse as well as older people.
The mobile population (the percentage of people who carry out most of their tasks on mobile devices such as phones and tablets) is on the increase and to remain in business, SaaS providers will have to prioritize the needs and demands of this population. There will be lots of emphasis on mobile design and functionality for SaaS tools.
The following are areas where we expect SaaS tools to optimize the mobile experience
- Easing the access to mobile functionalities for people with autism, learning difficulties, ear or eye impairments, and the likes
- Out of the world mobile experiences by leveraging the VR and AR capabilities
- Improved personalization on mobile applications
- Increased ability to take feedbacks in-app to help with the upgrade and update processes
- Features with increased responsiveness and functionality
#6 Increased Need for API Connections
An important aspect of software development is API which stands for Application Programming Interface. However, it seems that the SaaS industry is about to revolutionize the way we see and use APIs.
As the adoption of SaaS increased across businesses and industries, there is an apparent need to include the concept in existing business solutions. While many organizations were content with moving all their data onto a cloud platform, some businesses opted for the combination of the physical infrastructure and cloud resources, with the hope that the cloud resources will optimize the performance of the physical infrastructures. This, however, was a problematic position.
In a bid to solve this problem, SaaS providers created more problems. Because they couldn’t build a complete integration system, the harmonization process of the cloud resources and physical infrastructure got complicated and led to the disappointment of customers.
The solution then was to redirect clients to an external API provider who supplies the needed API for harmonizing the physical and cloud resources. This has been the go-to solution for many years till now.
SaaS providers are now able to provide APIs that connect your cloud platform to the physical infrastructure, aiding the optimization of the whole operation. In the coming years, we will see more of these APIs and businesses will be able to combine offline resources with cloud resources for a seamless operation.
#7 No-Code and Low-Code Functionalities
One of the features of SaaS that is expected to continue in the coming years is the low-code feature. Thanks to this feature, startups can have their SaaS tools fitted with content in no time with little or no technical help or support.
And contrary to the belief by many IT experts, these low-code and no-code platforms would not reduce the need for developers and engineers. It only means that technical personnel such as engineers do not have to worry about providing technical support when you are building the foundation of your platform or solution. They get to face issues that require a great deal of technical knowledge.
If you get a no-code or low-code BI platform, you can customize it to fit your business needs without having to worry your developers and engineers about the supporting operation. This way, these engineers can get to devote more energy to the development process which is going to make the actual difference in the long run.
With low code and no-code platforms, we will have a rapid influx of solutions and platforms in the market, and have new players also emerge to challenge the status quo and raise the bar for excellence.
#8 Switching to PaaS
With the increased adoption of SaaS tools, businesses will have to worry and focus more on customer retention rather than customer acquisition. And in a bid to retain more customers, we may see many businesses attempting to move to the Platform as a Service model, to build more custom apps and add-ons to their platforms.
We have seen this possibility play out with solutions such as Box and Salesforce. These SaaS tools have started services centered around their platforms in a bid to get more share of the market size. This trend is expected to continue in the nearest future.
To put into context, the following are the main benefits of migrating to a PaaS model
- Scalability: PaaS models can provide more flexibility and adjustment for meeting fluctuating customer needs.
- Agility: You will be able to innovate and develop your business offerings by using the improved functionality made available by PaaS models.
- Security: This is the main benefit of switching to a PaaS model from a SaaS tool.
These are a few of the trends that we expect the SaaS industry to take on within the coming years. Other trends include Micro SaaS among others.
>>More: Definition, Benefits, & Difficulties of SaaS Reseller Partnership
Conclusion
These trends are going to shape the SaaS industry and the tech world at large in the nearest future. While some of these trends have started in the last few years, others are just starting and some are still in the pipeline. Regardless of the state, businesses should do more research on these trends and understand how they can be a part of the revolution that follows these trends.