The Software as a Service industry has taken the tech world by storm in recent years and is creating a digital transformation that permanently changes the world of technology and software development.
The SaaS market is quickly growing and will continue to grow with no signs of slowing down. In fact, all predictions point to several billion-dollar increases in the coming years. It is no surprise then that the future of tech and the future of SaaS are closely linked. Therefore, investors and owners of small and large businesses alike want to keep an eye on the direction that SaaS is headed.
The year 2020 was a breakthrough year for SaaS companies due to the ongoing pandemic and necessity of an increase in work from home solutions. SaaS applications such as Zoom, Slack, and many others saw a significant increase in sales and success while helping businesses stay open and connected.
With the high level of success, increase in demand, cost-effectiveness and constant development of the world of SaaS, we have outlined below the Top 10 SaaS Trends that stand out in 2021.
1. Machine Learning
Artificial Intelligence is now at the forefront of many industries, and SaaS products are no exception. AI integrations and applications are being added to most SaaS businesses to streamline and increase productivity. This is utilized in the functions of automating repetitive tasks within software, introducing AI-powered chatbots to assist in user relationships and help desks, and much more. As time continues, if AI can be paired with a function to increase success, it will be.
2. Vertical SaaS
Vertical is the term for SaaS that is created to target niche or narrow markets. It mainly targets specific industries that need tailored functions, such as in the healthcare industry. Most SaaS giants are created broadly (or horizontally) to be used by any business in any industry, but this leaves personalization gaps. Therefore, Vertical SaaS solutions can be used to upsell clients of established companies that need more specific functions or can be a market entry point for new startups.
3. Micro SaaS
The SaaS market has limitless room for growth, change, new ideas, and entries. Still, it is comically oversaturated in specific functions or products (think e-mail). In the case where a market giant has a stronghold, companies are finding a way to capitalize by creating add ons, plug-ins, and extensions to already functioning SaaS. These are called Micro SaaS. An example being: Boomerang for Gmail, a way to schedule and track emails. This is a way for small businesses or smaller ideas to join in on an established market and increase productivity and success.
4. Mobile Optimization
More than ever, people embrace the opportunity to be in constant connection and communication through smartphone use. SaaS companies who take advantage of this opportunity and create Apps that function well with desktop compatibility or stand-alone functions will continue to thrive. Offering freedom to clients by optimizing mobile functions allows clients to work and communicate from anywhere at any time.
5. White Labeling
A new SaaS business model that is on the rise is White Labeling. This is where software companies will create a fully developed SaaS product to sell it to another company that then markets and operates it under their brand name. This is a way for new startups to enter the market with less financial backing or software expertise. This model has been seen in SaaS payment functions and can work in other markets as well.
The ability for SaaS functions to integrate across platforms is a telling marker of whether a SaaS company will succeed or not. The market is growing and expanding. If your company cannot offer a particular easy-to-use function, the odds are high that a new company will come along and meet that need. This explains why many SaaS companies are increasingly adding the ability to link apps. There are even SaaS companies such as Zapier, whose entire function is about integrating and automating functions across applications.
This is a feature that many SaaS companies are moving towards to increase customer retention. Often, small business customers leave a company because they pay for packages and functions that they simply do not need. If your company only offers package deals at higher price points than customers can afford or are willing to pay, customer churn will increase. Offering the ability to unbundle a package and pay for specific functions and actions allows customers to remain clients while maximizing their budget and efficiency.
Platform as a Service is a type of SaaS that allows companies to create and develop their own apps or software. For the most part, PaaS has involved heavy coding knowledge and been used by developers to create these apps. However, with the rise of integrations and the emergence of options, many companies offer users the ability to personalize, develop, and offer their own platforms to users.
9. Low Code
As touched on above, non-tech savvy business owners' ability to break into the SaaS world is steadily increasing. With the increase of white labeling and move toward PaaS offerings, low coding abilities and integrations are moving into the SaaS world. We expect to see this trend continue and move into various other aspects of SaaS as well.
Security is not often a concern in the world of SaaS. Measures tend to be very secure. But as SaaS availability, users, applications, and links between apps grow, security measures need to grow along with it. Each company will need to ensure that security keeps up with growth. This also leaves room for more SaaS Security companies to enter the market.
These Top 10 SaaS Trends in 2021 all involve growth, increasing efficiency, and streamlining programs. At RevTek Capital, it is our desire to see SaaS companies grow and make changes to keep up with market demands to succeed.
We are available to invest in your growing company and give advice on how to best set financial goals that aid in growth. To schedule an appointment with our team, call (480) 332-0399 today!