Software as a Service (SaaS) is becoming an increasingly viable solution for organizations who want the accessibility and versatility of software solutions without having to rely on installing and running applications on their own computer systems and data centers. Essentially, it’s taking over the cloud computing market. According to IDC’s Worldwide Semiannual Public Cloud Services Spending Guide, SaaS will account for roughly 60% of public cloud spending by 2020.
SaaS is a software distribution model that offers a lot of agility and cost-effectiveness for companies, which is why it’s such a reliable option for numerous business models and industries. It’s also popular amongst businesses for its simplicity and user accessibility, security, and widespread connectivity that serves to further streamline business models. Most companies are today implementing various business intelligence strategies, and are hence turning to SaaS BI tools for the matter. In this article, we will outline three important SaaS trends that will stand out in the coming year.
Some of the key characteristics of SaaS include:
- Flexible payment options: Businesses don’t have to go through the expense of purchasing software and hardware. Instead they have the option of utilizing various pricing structures. Flexibility in payment models, where they only need to pay for the resource usage they need for instance, is attractive for many.
- Scalability: Cloud SaaS enables businesses to easily expand due to its ingrained scalability. Companies can be selective about the types of features and options they want.
- Updates: SaaS providers handle the necessary software updates and develop new features over time, so businesses don’t have to handle this aspect.
- Accessibility: Businesses have the mobility of accessing applications from any digital device and location, making it particularly convenient for mobile platforms. Additionally, it boasts ease-of-use and is user friendly.
- Increased collaboration: It enhances a business’s ability to promote collaboration across teams and departments due to the facilitation of file sharing, and ease of reading and understanding across systems.
- Security: Most SaaS models are known for their enterprise-level security, which is a more holistic approach to security than a lot of centralized, on-premise solutions. In Cloud SaaS, pre-existing disaster recovery protocols are in place to manage potential system failures. This means that your business’s data is available and secure regardless of a data breach or system failure.
As businesses continue to rely on innovative tools and technologies to increase their productivity and efficiency, the SaaS industry is only going to grow.
Many forecasts have been conducted, and even if figures diverge, they still agree on an obvious reality: the market is going to get bigger and bigger. Indeed, according to Forbes, public cloud platforms, business services, and applications (SaaS) will all grow at a 22% CAGR (Compound Annual Growth Rate) between 2015 and 2020, reaching $236 billion. A Betterbuy.com report reveals that the specific expenditure in the U.S. SaaS Industry forecasted to reach $55 billion by 2026. Gartner sees bigger: the worldwide SaaS market will grow to $75 billion in 2020.
Statistics indicate that 2018 is going to be an interesting trendsetting year for SaaS trends. Three trends in particular are showing signs of standing out as top 2018 SaaS trends, that we will detail in the rest of this article:
- Artificial Intelligence
- Vertical SaaS
- The growing need for API connections
The Three Key SaaS Trends For 2018
1) Artificial Intelligence
Today, Artificial Intelligence is all over the place and we can’t stop talking about it – it made the top list of our business intelligence trends for 2018. Artificial Intelligence (AI) technologies are becoming more widespread, and 81% of world’s IT leaders are already working on developing AI systems. AI optimizes businesses processes, increasing productivity and efficiency while automating repetitive tasks and supporting human capabilities.
Within business scenarios, Artificial Intelligence (as well as Machine Learning, in many cases) provides an advanced degree of responsiveness and interaction between businesses and customers and technology, driving AI based SaaS trends. At datapine, we developed a new feature based on artificial intelligence: the data alerts. With an AI algorithm using the most advanced neural network for anomaly detection, and a machine-learning algorithm for pattern recognition, these data alerts learn from trends and patterns and let you know as soon as something important happens. That way, when a pre-set goal is met, or whenever something unexpected happens, you will be notified and keep full control over your business. Since it is often easy to lose track of what really matters when so many KPIs have to be monitored, our online reporting software will safely keep an eye on your data and anticipate any fluctuation and change – and alert you when it veers off.
Artificial Intelligence is positioned to disrupt the SaaS landscape in a variety of ways, improving the key characteristics of the SaaS model across the board. When SaaS is combined with AI capabilities, it enables businesses to obtain better value from their data, automate and personalize services, improve security, and supplement human capacity.
How will AI improve SaaS in 2018?
- Automation: Machine Learning, a subset of AI, is utilized in SaaS to automate responsiveness in customer service applications, such as AI-powered chat operations, such as live chat bots. It will also automate the onboarding process of SaaS.
- Personalization: Software is easier to use with technologies such as Natural Language Processing (NLR), which automatically processes human speech patterns, and voice control. This can be deployed across customer service functionality to improve customization and better address client needs.
- Speed: Artificial Intelligence enabled SaaS speeds up internal processes and operations, allowing businesses to obtain fast answers to questions, make quick forecasts, and speed up their overall level of responsiveness.
- Security: Due to Artificial Intelligence enabled automation, and the ability of Machine Learning to recognize patterns, SaaS security becomes enhanced through the quick identification and remedy of potential threats with built-in self-recovery.
Artificial Intelligence-optimized SaaS solutions provide businesses with the ability to augment their internal processes with fast automation, more efficiently address customer service operations, and improve the level of personalization and responsiveness throughout their processes.
2) Vertical SaaS
Our second forecast for SaaS trends in 2018 is Vertical SaaS. Whereas Horizontal SaaS focuses on clients across any sector and industry, Vertical SaaS is completely customizable and targets clients within specific industries and supply chains. Some examples can be a healthcare BI software, a retail analytics software, or modern logistics analytics. Companies who are looking to benefit from specialization are finding Vertical SaaS to be a cost-effective, industry-specific option that allows them to refine the customization of certain features.
Why are Vertical SaaS trends going to have such an impact in 2018?
Vertical SaaS providers also have the ability to adapt features according to client demand and industry, and effectively address customer needs within their niche. This results in more flexibility and upselling opportunities, and lower customer acquisition costs.
Vertical SaaS also provides the following benefits:
- Customer intelligence: Enables businesses to obtain industry specific customer data and intelligence, which plays a critical role in gaining customer focused insights.
- Pre-defined metrics and KPIs: Vertical SaaS is already integrated with pre-defined metrics, KPIs, and analytics that businesses can utilize to assess and address daily and long-term processes and performance.
- Business value: Software is aimed to meet industry requirements; therefore, it provides a higher degree of business value for company operations and performance.
- Improved data governance: Vertical SaaS is positioned to address data governance procedures via the inclusion of industry specific compliance capabilities, which has the additional benefit of providing increased transparency.
3) The growing need for API connections
The API (Application Programming Interface) has been a fundamental part of software development for years. With the explosion of SaaS solutions and adoption by the market, the need to integrate them into an existing business system appeared. Some companies may want to migrate all their data to a cloud platform, but many actually would rather harmonize it with their already existing infrastructure in order to improve it: and this is where the problem lies.
In the past, SaaS providers didn’t come with a complete integration solution at first, which complicated the work greatly and did not meet all their customers’ needs. They were then redirecting them to a third-party that was developing the specific APIs enabling the customer to integrate the cloud solution into their existing system. It was indeed better for the SaaS developers not to reinvent the wheel, and win some precious time and resources relying on third-party APIs. Their go-to-market timeframe was shorter, and they could focus on their core capabilities to develop differentiated functionality.
However, more and more SaaS vendors tend to provide greater integration capabilities instead of redirecting their customers to third-parties. As Benoit Lheureux, vice president of research firm Gartner Inc., says to Tech Target: “redirecting your customers to a third-party for integration solutions when integration is a requirement in every IT project of substance is falling short of meeting your customer requirements”.
If you are looking to invest in a cloud vendor’s services, you should ask the following question beforehand to ensure a seamless integration:
- What capabilities is the provider offering me to integrate the SaaS within my existing business system?
- Can this provider also integrate legacy systems I use?
- Is my data protected while the integration process is happening?
Enhanced SaaS Solutions for 2018
SaaS trends aren’t showing any signs of slowing down, and innovative SaaS solutions will only continue to grow in the coming years. Artificial Intelligence empowered SaaS, Vertical SaaS, and the growing need for and dvelopment of API conncetions are our top three SaaS trends for 2018. As data continues to be the driving force behind smart business strategies in a digitally dependent world, SaaS are going to be an increasingly convenient and affordable option across industries, both now, and in the coming years.
With these three SaaS trends positioned to further enhance cloud-based solutions as we stand on the cusp of 2018, organizations will have the technological capabilities to drive their business objectives towards successful outcomes.