The SaaS industry registered a 11.2% growth rate in 2023. With AI becoming increasingly popular here are the SaaS trends, stats to watch out for. In this article we discuss about SaaS trends, stats to watch out for in this decade.
Table of Contents
1. Collaboration software to only get more popular
The rise of remote work and hybrid model work after Covid 2019 has propelled companies towards adopting collaboration software. Companies are increasingly using remote jobs to reduce costs.
Today we cannot imagine remote work/hybrid work without collaboration software. From here, collaboration software will only keep getting better.
2. More migration by to Cloud SaaS
Businesses are spending more and more to migrate their IT systems to cloud infrastructure. What is interesting to note is that small and medium enterprises also form a significant part of this trend.
According to Gartner, worldwide spending on public cloud services is estimated to grow at 20.7% in 2023.
3. Forecasting and Predictive Analytics
As data models are getting more and more accurate forecasting and predictive analytics is becoming easy day by day. With vector embeddings’ given prospects and popularity, forecasting and prediction is about to become more accurate than ever before.
Industries such as fashion, e-commerce can reduce their inventory turnaround time and wastage by accurately forecasting their demand.
4. SaaS for improving retention rates
A retained customer will gain more priority over new customer simply given the kind of acquisition costs it takes in today’s competitive landscape. Companies would want to leverage their SaaS tools to improve retention rates and hence the LTV of a customer.
DTC brands, software companies, service companies would want to leverage new tools to improve retention rates as competition heats up. Also a retained customer would provide more insights and feedback in getting the right product market fit.
5. Generative AIs
With the advent ChatGPT and Bard AI, the generative AIs have found applications in virtually every other industry. Amazon and Apply are working on their generative AIs platforms.
The integration of Generative AIs by Saas providers could very well help in training their vendor’s employees especially when it comes to searching for “How-To” stuff.
6. SaaS trends in the age of stricter Data Protection
With more countries becoming stricter towards personal data protection, companies could find it difficult in complying the same across different countries.
SaaS companies can help the companies in complying with different data protection laws across countries without compromising the customer acquisition rate.
7. Mobile First Approach
A study by Data AI says that smartphone users are using nine applications per day and thirty applications per month. With mobile users touching 4 billion all over the world, Saas companies are increasingly adopting a mobile first design approach.
With mobile first approach the user interface will get less cluttered and more user friendly. We hope the days of unnecessary pop ups are numbered with mobile first approach.
8. Increased use of Low code and No Code platforms
Low code and No code platforms are in their initial stage of adoption. They have democratized the ways apps can be created. Today it is not necessary to have in-depth knowledge of programming for creating apps.(thanks to Low code and No code)
Gartner estimates that low code development technology will grow at 20% in 2023. Productivity, automation and efficiency have been attributed to the rise of low code and no code platforms.
With the development and adoption of AI, personalization will enter a next level. We will see companies adopting a customer first approach by deploying AI to tailor experiences to each individual.
Personalization in customer service, sales, marketing departments will help acquire and retain customers. This will reduce the churn rates and improve customer lifetime value.
According to this study, SaaS misconfiguration led to security incidents.Having a secured environment is not only dependent on cyber laws but also on digital infrastructure.
Unfortunately data breach and vulnerabilities are a reality today.
Cybersecurity and SaaS security require a sophisticated framework to prevent vulnerabilities. Given the kind of problem it is we can expect influx of SaaS companies in developing a robust cybersecurity protection. (Security as a service)
11. Evolved API
API based SaaS have contributed a lot in the SaaS ecosystem. But with the rise of integration feature in SaaS and demand for more rate limits there is need to have a robust API.
SaaS companies are increasingly adopting practices such as semantic versioning and continuous integration/ deployment to ensure optimum request per second ratio.
With ever evolving technology, SaaS industry is gearing up to disrupt other industries for good. Tell us in comments what you think about SaaS trends.
12. White labeling
SaaS white labeling means a product is developed and owned by “X” company while it is being rebranded and distributed by “Y company”. This trend is increasingly becoming popular thanks to the flexibility it provides.
Take an example of ActiveCampaign. There are resellers who add their offerings/features to the existing ActiveCampaign platform and promote/sell it to potential customers.
However, the next level of user experience is the gamification of apps. We can see many consumer facing apps like DuoLingo who have gamified the experience in learning a language.
For Saas platforms and particularly for enterprise based Saas platforms gamification will not help in improving the user experience but also in creating tutorials, training videos, How-To guides related to the usage of a particular SaaS product.
Increasing use of SaaS products can be counter productive when integrations take time or are limited to only few softwares.
SaaS companies do realise this and are now prioritizing integrations in their products. More and easy the integrations more is the accessibility.
15. Vertical SaaS
Vertical SaaS is the one that is intended to serve niche users or tailored to serve a particular industry. Horizontal SaaS such as CRMs, project management softwares have dominated SaaS industry.
Until now vertical SaaS companies have witnessed a slow growth in comparison to horizontal SaaS companies. However in the coming years vertical SaaS companies thanks to the industry specific problems that they solve.
According to research conducted by Forrester Consulting, professional services organizations are replacing generic SaaS with vertical SaaS. The study claimed that (89%) of IT leaders agreed that vertical SaaS is the way of the future. (Source : Kantata)
16. Data as a service (DaaS)
According to the study, data as a service market is set to grow at a CAGR of 36.92%. In terms of sheer number it will grow by $56.85 Bn in 2023 -2027.
There is no secret that data is important. They say data is the new gold. But not exactly. We think accurate data is the new gold. With vector embeddings taking the centre stage the data as a service(DaaS) will have multiple industry applications.
17. Multicloud Architecture
Companies using cloud computing services from various vendors is called multicloud computing. Multi cloud computing helps companies to opitmize their cloud infrastructure.
However as of now cost in the biggest factor holding companies to adopt multicloud architecture(HashiCorp). Although in the long run cost savings is one of the main advantages of multi cloud architecture.
As security continues to garner the most priority in the future we expect multi cloud architecture to go mainstream.
18. Advanced Chatbots
According to SkyQuest, the Chatbot Market is expected to Surpass USD 37.83 Billion by 2030 at a CAGR of 24.3%.
Most of this demand has been attributed to advanced customer support as well as growing adoption of messaging platforms.
Also with the rise of AI and no code tools it is now becoming quite easy to deploy a chatbot.
19. Platform as a service (PaaS)
Platform as a Service (PaaS) gives developers a place to build, deploy, and run apps without having to worry about the infrastructure underneath.
The PaaS provider offers a set of tools, development frameworks, runtime environments, and services that let developers focus on writing code and making apps instead of handling the complicated hardware, operating systems, and networking.
According to Statista, the average spend per employee for platform as a service was $32.56 as of 2023.
According to a study conducted by Allied Market Research, the global platform as a service market is expected to reach $319 Billion by 2030.
20. Micros Saas
Micro Saas is increasingly becoming popular thanks to the required specialization in the industry.
Analytics has compelled businesses to take more data driven decisions.