Once upon a time, people didn’t know that instead of on-premise installations, they could use SaaS products. Thanks to the efforts of hardworking developers, SaaS is now a great solution for many businesses across various industries. Are you curious to know what SaaS is and discover the top trends that will dominate in 2020? If you are, let’s jump in!
Software-as-a-services (SaaS) is a software licensing model that can be accessed by users on a subscription basis with the application located on external servers. More often, companies provide SaaS services on hosted platforms. The main advantage of the SaaS model is that its software products are easy to maintain. Let’s give you the example of Google Docs to explain to you better what SaaS means. Everybody knows that it is free of charge and installations are not required at all. The only thing you need to have is a personal Google Account. What is great about Google Docs is that any changes and edits to your documents are automatically saved.
So, will the SaaS market grow? Some sociological forecasts prove this fact. According to the graph from Statista, its market share is expected to be $157 billion by the end of 2020.
The SaaS industry is constantly evolving, and new trends are currently emerging. In our article, we’ve picked up the top 10 trends in SaaS to be considered in 2020. Let’s look at them one by one to get the most of the SaaS opportunities!
1. AI Algorithms to Enhance Security of SaaS
AI technologies jump on the bandwagon of fighting cyber attacks. Kevin Skapinets, a Vice President of Strategy and Design at IBM Security, thinks that AI algorithms are helpful to detect and predict the common patterns of threats. So, how can Artificial Intelligence be at hand? By implementing this technology, it’s possible to identify malware and ransomware attacks before they enter a software system. Automation is another advantage of AI in strengthening data security for SaaS. Oracle, a US computer technology giant, applied this trend to its services and expanded one of them – Cloud Access Security Broker. As a result, developers managed to fasten the process of threat detection with AI algorithms.
2. The Boom of SaaS Products for Remote Work
According to TechCrunch, there are many great SaaS tools on the market that might get a new usage now as the novel coronavirus outbreak continues to spread into new regions of the world. Let’s mention several software instruments that will be at your fingertips when you work from home. Need to organize a webinar, conference, or a business meeting? By installing Zoho or other SaaS-based products on your device, you’ll manage it without a hitch! With Zoho, you can conduct a 40-minute meeting with 100 participants for free. How about communication? Slack, MatterMost, and many other SaaS tools will help you to keep in touch with your teammates and make sure everything is on track.
3. White Labelling in SaaS
White labels are products or services produced by one company and purchased by another one with an aim to sell it under their own brand. But what is white labeling in SaaS development services? Imagine that your company sells dashboards for business, and your products are highly customizable. When a client buys your dashboard, he or she can make changes adjusted to his or her business – whether it’s a URL, website domain, e-mail, etc. White labeling in SaaS helps entrepreneurs enhance their branding without extra costs on infrastructure or development. Among the famous SaaS white labelling companies, there are:
- Weblium, a website constructor
- AppInstitute platform for app development;
- Flywheel — a web hosting platform.
4. The Growth of Low-Code Platforms
The low-code platform market will continue to evolve in the future. In 2022, its annual growth is estimated at $21,2 billion, which is 40%. A product manager from Zoho Creator, Tejas Gadhia, mentions that most of the productivity tools for employees will be low-code. By the way, low-code platforms are beneficial for developers to create drag-and-drop interfaces and integrations flawlessly. A high productivity and faster iteration are among numerous benefits low-code platforms deliver. Here are several examples of low-code platforms used by companies to optimize their working operations:
- Kissflow — a SaaS workflow management instrument;
- Mendix — an app development platform;
- Salesforce — a cloud computing service that offers CRM solutions.
5. The Emergence of Vertical SaaS
The vertical Saas model focuses on specific needs of a single industry in contrast to horizontal one. Salesforce, SAP, Oracle, and many other renowned companies started as horizontal SaaS products. But they changed their marketing approach and implemented the vertical SaaS model to attract more clients and grow profit.
All business owners realize the importance of positioning their companies as industry leaders. That’s why more and more entrepreneurs are now using a vertical SaaS model, which is more industry-oriented than a horizontal one. Not only the business sees a vertical SaaS model as an opportunity – investing companies do the same by funding successful ventures. Have you heard about Meicai – a Chinese platform that connects vegetable farmers with restaurants? Tiger Global Management and Hillhouse Capital, a US investment firm, gave between $600-800 million to this venture in 2018.
6. The Rise of MicroSaaS
A microSaaS is a small instrument developed by one person or a group of people to improve the functionalities of existing SaaS products like adds-on, extensions, and so on. So, why is microSaaS trendy? It helps business owners outpace the key competitors and find a unique niche on the market.
The other benefit of microSaaS products is that they don’t need additional overhead from the outside investment companies. Have a look at well-known companies that applied the microSaaS approach – Grammarly, an online editing tool, and Social Sprout, a social media software instrument. Both of them have $200 million and $111,5 million of total funding respectively, and they still occupy leading positions in their fields.
7. The Need for API connections
Businesses seek to provide well-integrated solutions to its services without creating a new IT ecosystem. That is why SaaS products must have more APIs to ensure data will be seamlessly integrated with existing IT infrastructure. LITSLINK’s high-end software engineers follow this approach to provide top-notch SaaS and cloud app development services.
Daniel Levine, a business partner at Accel, thinks that APIs have a tremendous impact on SaaS development as they help to ensure high extensibility and seamless integration. Have a look at Stripe and Plaid. Stripe, an online payment platform for running business online, focused on the API-first approach and generated over $22 billion. Plaid is a platform that connects banking data and accounts with apps. In 2019, the company collected $2,5 billion.
8. Product-Led Growth (PLD)
It’s a go-to-market tactic that relies on a product to acquire, retain, and engage clients. How can SaaS companies use this approach? They focus on consumer-like virality components for their product feature set and ensure hassle-free sign-up that doesn’t require a credit card for setting up an account. MailChimp, Slack, and Dropbox use this strategy to engage their clients and attract new ones. So, will a product-led growth method be popular in the SaaS market? Sure, it is expected to gather steam soon. HarshiCorp that specializes in cloud automation infrastructure successfully applied this trend. With this strategy in mind, the company increased its value to $1,9 billion and gained 45 million downloads.
9. Migration to PaaS
The SaaS market is on high gear of competition that leads companies to look for new ways to improve their products.PaaS (platform-as-a-service) is often an appealing option for companies in terms of product development and customer retention. Thus, many of them choose to migrate to scale their products further.
So, what are the key benefits of PaaS? In terms of the development process, PaaS is characterized as a highly scalable, agile, and fast alternative to SaaS. For business, it’s easy to build custom applications as add-ons to their main to ensure their superior flexibility. Box and Salesforce, SaaS-based market leaders, have recently followed this trend and migrated to PaaS By doing that, SaaS vendors strive to enhance client retention and increase demand for their services.
10. Mobile-First Approach in SaaS
According to the figures from Statista, the number of mobile unique users was 4 billion in 2019. As of January 2020, there were 4.18% unique mobile users and 4.54% active Internet users in the world. The number of mobile users is still increasing, which forces SaaS companies to adapt their services to mobile devices. Dropbox, Skype, and many other renowned companies implemented the mobile-first approach in their business models. SaaS-based project management and communication tools like Trello, Jira, and MatterMost have mobile versions as well.
Now, you are aware of the top 10 trends in SaaS that companies will definitely see in 2020. AI solutions, remote and mobile-first approaches, white labelling, low-code platforms, vertical SaaS, microSaaS, API connections, PaaS and product-led growth may help to boost your business and make it more efficient. Catch on to these trends to outpace your competitors, acquire new clients, and generate more revenues!
So, if you seek a reliable technology partner for SaaS development services, contact LITSLINK and our software experts will gladly help you to make your product stand out!