April 17, 2024
SaaS as a delivery model continues to dominate the market. By offering flexibility and accessibility to the users, SaaS business owners easily gain a loyal user base, get predictable income, and leverage the power of cloud computing to simplify the maintenance and scaling of their applications.
If you are thinking about creating your SaaS startup, discovering the top SaaS industry trends is one of the essential things to be done to ensure your future product’s success. In this article, we have gathered the most important trends in the SaaS industry that will be shaping the SaaS market in the next few years. Get yourself acquainted with these trends and think you can apply them to your SaaS startup.
Now, we will examine ten trends that are likely to greatly influence the SaaS market in the coming years.
The SaaS market is crowded: there are more than 30,000 SaaS companies in the USA only. That’s one of the reasons why vertical SaaS solutions gained popularity in the last few years. Unlike horizontal SaaS, vertical SaaS is a solution created not for a wide range of businesses but for a specific industry, such as retail, insurance, healthcare, etc. Targeting a certain industry helps vertical SaaS providers stand out in the market.
For small startups, the development of a vertical SaaS solution appears to be especially beneficial. Trying to create an all-in-one solution and gain a competitive advantage and market share with it is a very challenging way to go. But creating a startup like Textura (which focuses on architectural contract and payment management services) or Zendesk (a platform for enhanced customer inquiries) gives you a lot of chances to address the needs of a narrow audience.
Unlike vertical SaaS applications that are usually designed to be an all-in-one solution for a certain industry, micro SaaS applications are made to cater to the needs of one specific niche.
Creating a micro SaaS application is a good solution for entrepreneurs with a small budget; such apps are managed by small teams and don’t require a lot of resources and time. Moreover, micro SaaS applications better resonate with the target audience as they strive to solve a unique problem. This allows for enhanced product-market fit and gives a better competitive advantage, even when operating with a limited SaaS marketing budget.
Almost any well-known website that offers to buy goods or services has personalisation features powered by AI. For example, when you shop for clothes online, the smart algorithm on a website will recommend clothes similar to those that you have added to your favourites or have been viewing frequently — the same way Netflix recommends shows you may like.
More and more companies are now thinking about approaching a SaaS software development company to enhance their business with the power of AI and ML. These technologies are often used to provide a hyper-personalised user experience for customers—AI-driven recommendation systems, chatbots equipped with natural language processing (NLP) and machine learning capabilities that provide personalised assistance, AI-powered educational platforms, and so on.
The simplest example is the integration of ChatGPT, which allows automating many processes in customer support, sales, and other areas, streamlining communication and enhancing efficiency while maintaining a personalised touch.
Platforms that allow users with minimal or zero technical background to develop small custom applications are projected to become more and more popular. Such platforms work by offering pre-coded templates and interfaces. Solutions like this are especially beneficial for small and medium-sized businesses as they are much cheaper than traditional software development.
Low-code and no-code platforms make application development more agile and democratic. For example, a marketing team can use a no-code tool to quickly build a lead generation form for a new campaign without relying on dedicated development resources or extensive coding knowledge.
However, it should be noted that such platforms are limited to the creation of simple applications with banal design. As for now, they are far from replacing custom software development.
Nowadays, many people feel a lack of privacy; our phones can track our location in real-time, the websites we visit, and even our conversations via specific apps and devices. That is why people start to value their privacy more and more with each day. Blockchain is a decentralised and secure solution for data management and transactions. Unlike traditional centralised databases where a single authority controls access to data, blockchain ensures that no single entity can alter the data without consensus from the majority of the network, thereby enhancing security and trust.
Blockchain may even become mainstream in the near future as many companies are likely to start implementing it to gain customer loyalty by ensuring enhanced privacy and security of the users’ sensitive data.
PaaS is a ready-to-use platform for developers that contains tools, services, and frameworks required for the whole application development lifecycle. For example, apart from cloud storage, Amazon Web Services (AWS) also offers pre-configured environments for various programming languages and frameworks. PaaS allows covering various business needs and makes the development process more convenient for the team. Developers can focus on the development process itself rather than dealing with the underlying database, servers, and infrastructure complexities.
The main benefit of PaaS solutions is that they work as all-in-one platforms. That is why many businesses will likely shift to PaaS in the next few years.
According to Cybercrime Magazine, global cybercrime damage costs will grow by 15% per year over the next three years, reaching $10.5 trillion annually by 2025. Thus, in the next few years, we can expect SaaS companies to keep fighting security challenges more intensively with each coming year.
As cloud computing becomes more and more popular, it raises concerns about its security among users. In the next few years, it’s expected that SaaS providers will start to enhance their security systems to provide superior protection of users’ data. It’s also expected that industry regulations in terms of security may become more strict.
Each SaaS business chooses the pricing strategy according to its financial goals and specifics. However, it’s predicted that the usage-based pricing model, also called consumption-based pricing, will continue to grow in popularity. Unlike other models that are based on fixed fees, usage-based pricing allows aligning the cost with the level of usage. This appears to be the most transparent and reliable way of pricing for users, so it's no wonder users will start giving preferences to it.
Usage-best pricing works best for industries where customers’ consumption needs vary over time or are difficult to predict and where customers prefer paying only for what they actually use (like ridesharing or bike rentals). However, it may not be beneficial for cases where users have stable and predictable usage patterns and in cases where users prefer the certainty of fixed pricing.
Think about how many subscription-based applications you have on your smartphone now. We can bet that every year there were more and more of them. It’s started to become a norm both for businesses and regular consumers to use their smartphones to access information and complete tasks. That is why now it’s especially important to make SaaS applications mobile-friendly, even if they weren’t initially designed for mobile devices.
With more people relying on mobile devices for work, communication, and entertainment, SaaS companies have started to prioritise mobile accessibility to remain competitive. By providing a seamless and intuitive mobile experience for your users, you can gain a competitive advantage in the market as well.
Imagine using someone else’s ready-made SaaS platform as your own for a certain monthly fee. White-label SaaS makes it real. Getting software with all the necessary features provided by a third-party company to fulfil some of your business needs may be the perfect solution to avoid a costly and time-consuming development process.
White-label SaaS promotes rapid time-to-market and cost-effectiveness as it frees from the need to develop software from scratch and allows for branding flexibility, scalability, and enhanced customer experience. As the demand for customisable and scalable software solutions continues to grow, white-label SaaS is expected to remain a prominent trend in the SaaS world.
As of 2023, the SaaS market worth is estimated at approximately 197 billion dollars and is projected to reach 232 billion dollars by the end of 2024. In such a competitive market, it’s especially important to follow the latest trends. If you already have a successful SaaS business, maybe it’s worth thinking about adding AI-based features. If you only have an idea for launching a SaaS business, maybe you should think about entering the vertical SaaS market.
