Today, we are taking a look at the state of Saas (Software-as-a-Service). Specifically, we’ll explain the recent growth in SaaS industry. We’ll address:
- The reasons why SaaS is growing
- What the benefits of SaaS for your company are
- The latest Saas industry trends
- The future of SaaS in the next few years.
Why is SaaS growing?
The number and type of users of SaaS products have increased rapidly. Companies of all shapes and sizes see SaaS as an affordable, agile and modern solution for their digital transformation. But let’s get into more detail and examine some of the main reasons why that’s happening:
Security and reliability
Having your own server handling your customer’s valuable data requires a huge investment, especially if you want it to be reliable. An easy way to ensure the security, reliability and efficiency of those systems is to use outside services like Amazon AWS or Microsoft Azure cloud.
Subscription-based pricing model
The subscription-based pricing model of SaaS solutions is also rapidly changing the way companies consume software. It takes a lot less upfront capital to subscribe to a SaaS product than to purchase on-premise software or a license to use it. It’s also more sensible especially for smaller businesses to pay a monthly fee, which opens up the SaaS market to greater demand and growth.
Multiple SaaS solutions
A single SaaS solution is not enough for large-scale projects. But luckily, companies can integrate this type of software with APIs, for example.
Multiple SaaS solutions can then provide users with a diverse set of resources to address different demands. As a result, organizations effectively get access to the necessary features and functionality for the end-user. But that also means businesses are now using more than one software solution, which is additionally raising the rate of growth of the SaaS industry.
SaaS Industry Trends
Now, let’s take a look at some of the biggest trends in the SaaS industry at the moment:
Artificial Intelligence and Machine Learning
Businesses are learning that having AI to analyze data can free their staff up to spend more time with customers. SaaS combined with AI capabilities enables these companies to get better value from their data, but also to automate and personalize their services, and improve overall security.
Machine learning is another fast-growing trend. Netflix’ personalized content suggestions are a prime example of machine learning in SaaS-type models. And these innovations are just the beginning.
Vertical SaaS providers offer the possibility of adapting features according to the demand of your company or industry. Vertical SaaS provides more flexibility and upselling opportunities, while effectively addressing customer needs. Examples of vertical SaaS include healthcare analytics software and modern logistics analytics.
Moving processes to the cloud comes with new security concerns. That’s why SaaS is focusing more on data security and protection, and cybersecurity in general. We’ll see this trend grow in the next few years as there will be more SaaS companies exclusively built around the need to ensure data security, privacy, and protection.
Cloud Growth: SaaS vs other cloud services
Cloud services are probably the brightest part of the future of SaaS. Despite all of the disruptions in the last few years, the growth of the SaaS industry remains steady thanks to cloud computing.
The recent anti-COVID-19 measures like social distancing, for example, were only possible thanks to cloud technology which allowed businesses to adapt to a new remote environment.
But all SaaS solutions are cloud-enabled systems. This means businesses can use the cloud to expand the functionality of their systems and extend it far beyond the initial offer.
Future trends in cloud computing
Growing worldwide public cloud spending
Organizations dominating the enterprise software world —such as IBM, Oracle, Microsoft — will likely maintain their market share for enterprise software products because the number of customers using SaaS is growing. Gartner expects worldwide public cloud spending by end-users to grow to $304.9 billion by 2021.
Multi-Cloud And Joint Cloud
This year we’ll see the beginnings of multi-cloud and joint provider cloud offerings, as providers realize they can partner up to accelerate launches, according to Park. The Oracle-Microsoft interconnect relationship that started in June of 2019 is an example of a relationship that could be expanded, said Young.
According to Derek Swanson, going serverless is the next evolution of application architecture. He noted that the serverless interface on the cloud will become the interface developers interact with the most in the next few years.
What’s the future of cloud computing?
Since companies are finding new ways to organize, process, and present data, we can expect cloud computing to become an integral part of our lives.
“The future of cloud computing will most likely represent a combination of cloud-based software products and on-premises compute to create a hybrid IT solution that balances the scalability and flexibility associated with cloud and the security and control of a private data center.’’, said Michael Corrado, from Hewlett Packard Enterprise.
If you already use SaaS solutions to automate your business operations and processes, managed services can help you further streamline your architecture and its usability.