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Software-as-a-service (SaaS) is becoming an increasingly viable choice for organizations in search of accessibility, functionality, and versatility in a cutthroat business environment.
It’s possible for companies to run SaaS software solutions and online data analysis without the need to rely on installing and running applications on their own computer systems and data centers. As such, these incredible innovations are rising in popularity every year.
SaaS now dominates the cloud computing market. Gartner predicts that the spending on public cloud services is forecasted to reach $679 billion in 2024 - a level of growth that will shape software as a service trends in the coming year.
SaaS is a software distribution model that offers a lot of agility and cost-effectiveness for companies, making it an incredibly reliable option for numerous business models and industries. It’s also popular among companies due to its simplicity, user accessibility, security, and widespread connectivity. In turn, software-as-a-service platforms streamline business models, resulting in maximum efficiency across the board. Today, most companies are in the process of implementing various business intelligence strategies, turning to SaaS BI tools to assist them in their efforts.
Last year was a breakthrough year for the SaaS world in many ways. With a new year on the horizon, in this article, we’ll explore 12 essential SaaS trends that will stand out in 2024 - developments that are pushing the SaaS market envelope even further.
But, before we do that, we will discuss the general characteristics revolving around the industry that will help put additional light on the SaaS trends 2024.
Soon, we’ll be digging deeper into game-changing software-as-a-service concepts. But before looking at our top SaaS industry trends for 2024, let’s dispel some common myths surrounding the market.
Dispelling 3 Common SaaS Myths
To offer you a full and panoramic understanding of the impact software-as-a-service is having on the professional world and get the best context of the latest SaaS opportunities and trends, here, we will dispel the three most common SaaS myths – consider them busted:
- SaaS tools offer just one application: On the contrary, SaaS tools range in form and function as much as any other type of software available today, so you can build a SaaS dashboard tool or use a SaaS-based email marketing solution, for example.
- SaaS is less robust and less secure than on-premises applications: Despite some SaaS-based teething problems or technical issues reported by the likes of Google, these occurrences are incredibly rare with software-as-a-service applications – and there hasn’t been one major compromise of a SaaS operation documented to date.
- IT professionals are anti-SaaS: Again, this is a complete myth, and like any disruptive development worth its salt, some IT professionals are reluctant to embrace SaaS as a concept. There are a large number of experts who recognize SaaS for ridding them of the day-to-day humdrum of traditional software while helping them better manage their own IT operations. This quote from Apple’s prolific founder, Steve Jobs, sums up the common view of SaaS from a technical professional’s perspective: “I don’t need a hard disk in my computer if I can get to the server faster…carrying around these non-connected computers is byzantine by comparison.”
SaaS: The Key Characteristics
Before we explore our essential software-as-a-service trends for 2024, it’s important to consider what defines SaaS as not only technological development but as a working business model.
- 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 pay for the resource usage they need, for instance, is attractive for many organizations in today’s competitive world.
- Scalability: Cloud-based SaaS enables organizations to expand easily due to its inherent scalability. Companies can be selective about the types of features and options they want.
- Updates: SaaS providers handle the necessary software updates and develop innovative features over time, so businesses don’t have to invest ample amounts of time in this particular area of operation.
- Accessibility: With SaaS, companies have the mobility to access applications from any digital device and location, making it especially convenient for mobile platforms. Additionally, it boasts ease of use and is user-friendly.
- Adaptability: Due to the seemingly limitless level of scalability, accessibility, and insight SaaS innovations offer, companies that use such tools or platforms will become far more adaptable to constant change or unforeseen organizational roadblocks.
- Increased collaboration: SaaS developments enhance a business’s ability to promote collaboration across teams and departments due to the facilitation of file sharing, in addition to distinct 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 many 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 breach or system failure.
As businesses continue to rely on innovative data discovery tools and technologies to increase both their productivity and their efficiency, and as new software-as-a-service trends continue to emerge, this young, groundbreaking industry can only go from strength to strength.
Even if figures diverge somewhat, the many forecasts conducted on SaaS industry trends in 2024 demonstrate an obvious reality: the SaaS market will get bigger and bigger. Indeed, according to Technavio, the public cloud platforms, business services, and applications (SaaS) market size is estimated to grow at a CAGR of 19.19% between 2022 and 2027. Reaching a value of US 313.45 billion, a big increase compared to US 107.78 billion in 2017. And according to Gartner, the global public cloud service market is projected to grow significantly in 2024 and beyond.
Without further ado, let's dive into the most important trends of the SaaS industry for the coming year!
The Top 12 SaaS Trends In 2024
Now that we’ve explored the key characteristics of software-as-a-service innovations, it’s time to dive deeply into the top SaaS trends in 2024.
From introducing artificial intelligence to enhanced mobile optimization and beyond, these SaaS trends will shape the sector at the dawn of the new year.
1) Artificial Intelligence
The first of our most impactful trends in SaaS is the autonomous, self-learning variety.
Today, Artificial Intelligence (AI) is deep-rooted in the veins of our society. AI made the top 3 of our list of business intelligence trends for 2024 – and in the coming year, it’s expected to keep making some serious waves. Artificial Intelligence technology is fast becoming a standard SaaS industry fixture. Autonomous innovations empower organizations across industries with the ability to drive greater product, service, or content personalization while gaining a deeper, data-driven understanding of the needs of their audience. The perfect storm of more return for less input means that with AI, businesses can become more efficient and more intelligent with fewer resources.
AI technology saw some significant developments in 2023, especially with Generative AI (GenAI). Several SaaS organizations have turned to this technology to improve their service. For example, after the global impact caused by ChatGTP, the online design tool Canva introduced a feature that allows its users to create designs using AI. Other industries, such as HR, are also planning to dive into this technology, with the software monday.com already announcing several GenAI-related features to be launched in 2024. Salesforce is another big company that has already dived into the topic of GenAI with “Einstein Copilot,” an AI bot that is able to help customers complete several tasks. Taking all this into account, it is no surprise that AI is set to become a real game-changer, with a projected market value of $1,811.75 billion by 2030.
Within business scenarios, artificial intelligence (as well as machine learning, in many cases) provides an advanced degree of responsiveness and interaction between businesses, customers, and technology, driving AI-based SaaS trends in 2024 to the next level.
There are numerous features developed by modern software providers based on artificial intelligence, such as data alerts. With an AI algorithm using the most advanced neural network for anomaly detection and a machine-learning algorithm for pattern recognition, these 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 when something unexpected happens, you will be notified, enabling you to keep continuous control over your company. Since it is often easy to lose track of what really matters when so many KPIs have to be monitored, an online reporting tool will safely keep an eye on your data and anticipate any fluctuation and change – and alert you when it veers off course.
Artificial intelligence is likely to disrupt the SaaS landscape in various 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 help to build a shining SaaS future?
- Personalization: Software is easier to use with technologies such as natural language processing (NLP), 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 organizations 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 is enhanced by the quick identification and remedy of potential threats with built-in self-recovery.
- Data Intelligence: The sophistication of modern SaaS-based AI platforms means that it’s possible to investigate emerging consumer intents, interests, and behaviors while consolidating invaluable data from various sources and cleaning and segmenting it in a way that offers optimum organizational value.
- Integrations: This year, we’re likely to see AI technologies integrate with a broader range of software types. As a result, it’s possible to create highly value-driven infrastructures that offer business-boosting value across almost every internal function or department imaginable.
All things considered, it is not a surprise that AI will position itself as one of the most relevant SaaS future trends for 2024. As seen through the points we just mentioned above, AI is helping revolutionize the SaaS landscape in a number of ways. By extracting autonomous insights that can be applied across several areas, including customer experience, product development, financial predictions, and much more, SaaS providers are able to improve their offers and use AI technologies to become more intelligent and successful with less effort and money.
In 2024 and beyond, we will see significant growth in AI-focused software as well as the introduction of AI technologies and features into existing SaaS solutions as a way to improve their overall functionality. As more and more software adopts it, more feedback will be gathered, leaving developers with enough insight to keep generating innovative AI-powered solutions.
Amongst some of the multiple innovations and technologies powered by AI, we will see machine learning as one of the most important ones.
Machine Learning (ML), a subset of AI, is utilized in SaaS to automate responsiveness in customer service reports and applications, such as AI-powered chat operations with live chatbots. It will also automate the onboarding process of SaaS. As ML is built on an autonomous operational model, innovations will facilitate software and platforms that empower businesses to automate significant chunks of internal operations other than customer service or experience alone.
A fresh injection of ML innovation will empower SaaS-style offerings to become self-improving, offering a level of intelligence and operational efficiency that will drive many industries forward.
Machine learning is one of the fastest-growing segments of software, and, as such, it’s a hottest current SaaS topics. As ML becomes an integral part of the AI-based software-as-a-service model, an increasing number of platforms will emerge that will help businesses across sectors:
- Train their software to learn from every task or interaction, gaining a greater level of intelligence and efficiency in the process.
- Dig deeper into contextual data and insights - the kind that can help you gain a real competitive edge.
- Improve internal collaboration and operations through more sophisticated communication models.
- Enhance consumer communications and service output by continually adjusting language, tone of voice, and practical functions in line with the ever-changing needs and demands of clients, partners, or customers.
On a highly commercial level, Netflix’s personalized content suggestions and Waymo’s self-driving cars that calculate increasing potential risk factors or journey hold-ups over time are examples of ML in SaaS-type models. As we enter 2024, these innovations will prove to be the tip of the automation iceberg.
2) SaaS security as a priority
During 2023, we saw multiple data breaches and cybersecurity attacks that left huge security concerns for the coming year. These concerns permeate industries and businesses across the globe, where many organizations are turning to modern technologies and processes to ensure a secure environment across the board. This is something that will rule the SaaS market in 2024, as the cloud is still subjected to various security threats and risks that need to be addressed.
According to Adaptive Shield’s latest SaaS security report, SaaS misconfiguration has been reported as one of the main security issues for cloud businesses since 2019. In fact, 63% of respondents said that SaaS misconfiguration led to a security incident in the past year, citing a lack of visibility into changes in the SaaS security settings and too much departmental access to these settings as two of the main causes for this issue.
In that sense, the report advises organizations to rely on automation tools to tackle these misconfiguration issues as soon as they occur. But not just that. Automation is expected to come as a great solution for security teams that are feeling an increasing burden over maintaining SaaS security. That said, only 26% of surveyed organizations use this type of technology. The rest still rely on manual work to assess security and remediate misconfigurations. This leaves them exposed as manual checks can usually be carried out monthly, and misconfiguration issues can go undetected for weeks before being caught.
As a solution, using SaaS Security Posture Management (SSPM) is the path to follow. SSPM tools provide automated continuous monitoring of SaaS applications to minimize configuration and security issues and stay compliant. Software-as-a-service companies that rely on SSPM can reduce the impact of a security breach by performing security configuration checks in real time. The chart below shows a comparison between companies using the technology and those that don’t.
**Source: Adaptive Shield**
Misconfiguration is just one of the multiple security concerns that are being discussed in the SaaS industry. Among some other issues, we can find the growing number of apps connected to a company’s SaaS environment as another potential threat. These apps are often connected by employees without the awareness of the IT or security team, granting access permissions to corporate data that leaves the organization exposed. All of this makes investing in security a top priority for SaaS businesses that want to thrive in 2024.
3) Vertical SaaS
Our next forecast for SaaS trends in 2024 is vertical SaaS. Whereas horizontal SaaS focuses on clients across any sector and industry, vertical SaaS is completely customizable, targeting clients within specific industries and supply chains.
Some examples are healthcare analytics, retail analytics, or modern logistics analytics software. 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 2024?
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, upselling opportunities, and lower customer acquisition costs.
These developing vertical SaaS trends also provide the following benefits:
- Customer intelligence: Enables businesses to obtain industry-specific customer data and intelligence, which is critical in gaining customer-focused insights.
- Pre-defined metrics and KPIs: It 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 designed to meet industry requirements; therefore, it provides a higher degree of value for company operations and performance.
- Improved data governance: Vertical SaaS is positioned to address data governance procedures by including industry-specific compliance capabilities, which has the additional benefit of providing increased transparency.
- New niches: As the demand for vertical SaaS solutions continues to trend upward, incredibly niche products and solutions will enter the market to address very specific industry pain points. Recently, a childcare management app launched and was so valuable it raised millions in funding almost immediately.
- A higher standard: Higher quality service from industry-specific vertical SaaS providers will continue to emerge as each developer aims to distinguish itself from the ever-increasing crowd. Increased competition will force SaaS providers in the vertical arena to meet the needs of their users head-on, which will spawn a host of innovative niche solutions.
What makes vertical SaaS tools so interesting today is the fact that they provide smaller businesses with the necessary features to make their work more efficient. In some cases, horizontal solutions that are made to “fit all” don’t offer specific functionalities because they will not serve most of their users, and the ones who do offer them might charge extra for them. That scenario has led some smaller or more industry-specific organizations to rely on vertical solutions to manage their daily operations in a more efficient and targeted way.
In fact, according to research by Forrester Consulting, around 89% of executives and IT leaders agree that vertical SaaS is the way of the future. That, paired with the growing online business landscape left after the pandemic, has turned the eyes of investors and venture capitalists to more niche solutions.
All things considered, in 2024, we should expect to see more vertical SaaS solutions emerge with the support of new investors who are targeting unaddressed niche markets. Definitely one of the most interesting SaaS adoption trends for the coming year!
4) Data-as-a-Service (DaaS)
In recent years, companies of all sizes have been using data to inform their most important strategic decisions. This growth, paired with the changed business landscape left after the pandemic, has turned the use of data into a necessity rather than a choice. However, collecting and storing data in-house has become unproductive and less secure. That is where Data-as-a-Service (DaaS) comes into the picture, positioning itself as one of the top SaaS trends for 2024.
Essentially, DaaS is a term used to describe cloud-based software for data management processes such as data collection, storage, integration, and analytics, among others. Through this, organizations are able to reduce the time it takes to make important strategic and operational decisions and increase the quality and reliability of their data in the process. Plus, it significantly decreases the time and costs of setting up data tools and processes across the organization, as cloud BI tools are way easier to set up than on-premise ones.
As with all other SaaS-based disciplines, DaaS offers users secure on-demand access regardless of location or device. Something that proved to be especially useful during COVID-19, as organizations struggled to collaborate in online environments. These conditions positively impacted the global DaaS market, which is expected to grow by $56.85 billion between 2023 and 2027, accelerating at a CAGR of 36.92%.
As the market becomes more competitive, in 2024, DaaS tools will continue to work to develop new features that will make the use of data more efficient and secure for companies across industries. ReportLinkers’ DaaS global market report cites data-as-a-service in blockchain technology as one of the main market drivers for the next years, paired with a growing need for predictive analytics. Software such as datapine offers easy access to multiple BI features, including dashboard reporting, predictive analytics powered by artificial intelligence, real-time data access, report sharing, and much more.
As good as this all sounds, DaaS providers will also face challenges that need to be addressed to offer quality products. Among them, we can find security at the top of the list. Given that DaaS requires users to transfer sensitive information, it is necessary to use encryption technologies to protect it.
As of today, experts position companies such as Microsoft, IBM, Facebook, and Google as key players in the DaaS industry. However, starting in 2024 and beyond, we can expect this market to grow exponentially, presenting an opportunity for smaller companies as well.
5) Migration to PaaS
As the software-as-a-service industry evolves and innovation increases, many developers or providers will focus on customer retention on top of customer acquisition.
That said, during 2024, we expect SaaS to migrate further towards the realms of PaaS (platform as a service) – developments that empower businesses to build custom apps as add-ons to their original services. The likes of Salesforce and Box have recently launched PaaS-centric services in a bid to hold a strong market share in their niche, and we expect to see this SaaS trend become all the more prevalent this coming year.
One of the major focuses of the PaaS evolution in 2024 will be helping startups and relatively new ventures scale successfully at speed.
A good case study is the one of the UK-based food delivery app Deliveroo. They used Amazon’s AWS tools to help expand its geographical reach while gaining an edge over its direct competitors by using a raft of in-built platform features. The app’s expansion plans proved successful, with more planned for 2024. This is a testament to the growing power of PaaS.
To put the relevance of this SaaS trend analysis into perspective, here are three key advantages of using a PaaS development:
- Agility: The enhanced features, functionality, and ability to customize will enhance your overall business agility, giving you more time and creative space to innovate and focus on your core commercial initiatives. Tools such as datapine offer intuitive customer retention metrics and dashboards to have a centralized view of your retention data.
- Scalability: PaaS offerings are, by their very nature, robust, flexible, and accessible, which means you will be able to scale your organization more easily by using a platform as a service.
- Security: A distinct advantage of the PaaS model is security, as the vast majority of such developments perform a host of automatic updates on a regular basis.
6) SaaS market consolidation
It is no secret that the SaaS market is more competitive than ever. This is leading big players in the industry to try to offer additional features and capabilities to their customers as a way to stay competitive and reach a wider customer base. That said, developing these additional features in-house is often too expensive and not worth the time and effort. As a solution, big players in the industry are acquiring smaller companies as a faster way to offer their customers a more complete product package and stay ahead of competitors.
Likewise, smaller companies are turning to consolidation as a secure way to reach a wider audience and make their businesses profitable. With the market becoming increasingly saturated, the chances of growing independently become smaller. Therefore, tapping into the reputation and trajectory of bigger players is often the best path to follow.
All things considered, we should expect to see multiple consolidations between companies in the SaaS market in 2024. These consolidations will not necessarily be between smaller and bigger players but between companies that can benefit from each other. In fact, in 2021, CRM giant Salesforce acquired the popular workplace software Slack for $27.7 billion. This consolidation is a win-win for both providers as Salesforce can offer improved communication capabilities to their users, while Slack can stand as a stronger figure against its biggest competitor, Microsoft Teams.
7) The emergence of SaaS superapps
As a consequence of the market consolidation we just discussed above, we can expect to see the emergence of SaaS superapps as a big trend in 2024.
As stated by Gartner in their 2023 Technology Report, a supperapp is “an app that provides end users (e.g., customers, partners or employees) with a set of core features, along with access to independently created mini-apps”. It is a platform to deliver consistent and personalized app experiences that are expected to provide a huge competitive advantage to its providers.
It is important to note that a superapp is more than an application that offers multiple features and services into one interface, it is a composable application and architecture in which multiple unrelated integrations can be built into one app.
In 2024, this trend is expected to gain even more traction, especially in the SaaS B2B landscape, where businesses are expected to develop “One API for all” by unifying several APIs into one. Such is the case of Alloy Automation, a no-code integration platform with over 200+ app integrations designed to help e-commerce founders, marketers, agencies, and more, automate processes in areas such as customer management, customer service, upselling, marketing, and others.
Another use case is data dilution and fragmentation, which is one of the most pressing problems that modern enterprises face today (particularly large companies and businesses that are scaling fast). According to studies, data ‘scattering’ or fragmentation is one of the biggest barriers to organizational growth or evolution, as it slows organizations down, creates confusion, and results in rafts of missed opportunities.
With poor data management still a widespread issue, many new SaaS providers are emerging to help businesses consolidate, organize, and access quality data (derived from various sources) in one centralized location or app. In addition to broadening platform integration capabilities, new concepts, including document management systems and digital asset management systems, are set to make their mark in 2024 and beyond.
Document management tools allow employees to access files and documents from various sources from one visually digestible and highly functional location, such as an online dashboard. Digital asset management solutions share a similar model, except they are focused on helping businesses locate and capitalize on their most valuable branding assets from a variety of locations or sources.
Another fast-emerging data fragmentation solution comes in the form of an Integration Platform as a Service (iPaaS). The concept here is to help companies connect fragmented data silos or ‘pipes’ and connect informational dots with ease - becoming more intelligent, streamlined, and successful as a result. Let’s discuss this trend in more detail below.
8) The emergence of iPaaS for enhanced connectivity
As stated by Gartner, an Integration Platform as a Service (iPaaS) is a “suite of cloud services enabling development, execution, and governance of integration flows connecting any combination of on-premises and cloud-based processes, services, applications and data within individuals or across multiple organizations.” In simpler terms, iPaaS solutions let businesses connect multiple cloud or on-premise applications, IoT devices, mobile apps, and more to create data flows between them and prevent any fragmentation.
The need for these kinds of solutions is directly related to the increase in the number of applications businesses use for their daily operations. A recent report states that companies use an average of 211 apps to operate, leaving employees at risk of errors or spending too much time jumping from one tool to another. This is not a good scenario, considering businesses must extract data from these tools to make important strategic decisions. This is why iPaaS tools have emerged as a big solution, focusing on empowering companies to use their data to its optimum capabilities. In fact, the industry is expected to reach $10.3 billion by the year 2027.
Amongst some of the main features and advantages you can find in an iPaaS are complete accessibility with an internet connection, multiple automation features to facilitate integrations and prevent human error, security controls like role-based access, an extensive library of connectors for popular SaaS and on-premise tools, and monitoring tools to check the status and health of integration apps. Additionally, the cloud nature of these solutions eliminates the need to install any hardware that must be regularly updated and managed, making them way more efficient and cost-efficient. Plus, they are scalable, meaning they can grow as the company grows.
It is important not to confuse iPaaS with PaaS, which we discussed earlier in the post. While the names are quite similar, they differ in their use cases. PaaS offers developers the tools and infrastructure they need to build and deploy cloud-based solutions in an agile way. At the same time, iPaaS allows them to integrate multiple on-premise and cloud applications in a user-friendly and efficient manner. That being said, they both offer similar benefits like lower operational costs, faster time to market compared to on-premise solutions, and scalability, which provides the flexibility to pay only for the resources the company needs.
In 2024, we can expect more and more organizations to start investing in iPaaS as a way to manage their data more efficiently and gain an advantage over their competitors in the digital age.
9) New pricing strategies amid cost increase
Moving on with our list of SaaS trends, we will cover a trend that we expect to see a lot in 2024. We are talking about a shift in SaaS providers' pricing strategies. The topic came to light in mid-November 2023 after Vertice, a SaaS and cloud spending management company, released its SaaS Inflation Index report. There, they discovered that software spending increased 17.9% in the past 12 months, blamed partly on new product investment but mainly on the increase in prices and overall inflationary pressures.
The research showed that, in 2023, companies spent $7.900 on SaaS products per employee—a 27% increase compared to last year. Likewise, SaaS spending as a share of total company costs is now at 14.1% compared to 12.7% in 2022, with companies spending $1 for every $8 on SaaS. This all translates into an 8.7% overall SaaS inflation, which means businesses in 2024 will have to pay 8.7% more money for the same SaaS products they used in 2023. This is not entirely surprising, as the report shows that 73% of software vendors increased their prices by an average of 12% over the past 12 months, with companies like HubSpot and Microsoft increasing their prices by 12% and 15%, respectively.
What is even more concerning for experts in the industry is the fact that SaaS inflation is 68% higher than that of other products, compared to 22% in 2022. In fact, the global consumer inflation is at 5.2%, which means SaaS costs are growing much faster than the overall cost of goods. This price rise affected specific software categories, such as sales with a 10.6% increase, finance with a 10.2% increase, and productivity with a 10.1% increase.
Another factor that is responsible for the 17.9% increase in overall software spending is a concept known as “Shrinkflaition,” which basically means that software vendors are charging the same price for reduced functionality. This is possible due to the complexity of SaaS pricing, which includes packages, license agreements, and other confusing elements that leave the room open for providers to make some unnoticeable changes.
For example, SaaS products that offer usage-based pricing, like credits, are now moving to a “use it or lose it” mentality, meaning if credits are not used during a defined period, they will expire, and new ones must be purchased. Another example of SaaS shrinkflation is bundling and unbundling features. Bundling features means asking the customer to pay more for additional features that they don’t even need, and unbundling features means some software providers will charge for specific features as standalone instead of as a package. Experts advise businesses to carefully assess their contracts and deals during renewal times to prevent falling victim to shrinkflation tactics.
As a part of all of this, many software vendors are shifting their pricing strategies as a way to increase revenue. According to Vertice’s report, 54% of SaaS providers still charge per user. This could change as more and more providers shift to a consumption-based pricing model. A good example of this is Snowflake. The data management company recently found success in implementing a credit-based model to make businesses pay for exactly what they use.
As you learned from all the numbers and statistics we just presented, in 2024, we can expect to see a “cost of software” crisis in the SaaS industry, with many providers changing their pricing strategies as a tactic to drive revenue growth. Businesses that highly rely on SaaS for their operations must be smart with negotiations and contracts to prevent the rising costs from affecting them significantly.
10) The growing need for API connections
The API (Application Programming Interface) has been a fundamental part of software development for years, and this is precisely what our next SaaS trend focuses on. With the explosion of SaaS solutions and their adoption by the market, the need to integrate them into an existing business system has appeared. Some companies may want to migrate all their data to a cloud platform. Still, many actually would rather harmonize it with their already existing infrastructure in order to improve it – and this is where the problem lies.
At first, SaaS providers didn’t come with a complete integration solution. That failure complicated the work and caused them to disappoint their customers as a result. They would then redirect their clients to a third party to supply 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 to win some precious time and resources relying on third-party APIs. Their go-to-market time frame 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.
If you are looking to invest in a cloud vendor’s services, you should ask the following questions 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 the legacy systems I use?
- Is my data protected while the integration process is worked through?
11) Low-code capabilities
Software-as-a-service platforms continue to expand their reach year by year, and 2024 will be no exception. Particularly due to the emergence of ‘white labeling,’ ‘no code,’ and ‘low-code’ platforms,
tech startups can bring their SaaS-based content to life with less technical experience.
SaaS white labeling will continue to grow in 2024 and is a process where a software-based business creates a fully developed, tested, and finalized platform and then sells it to another company so they can customize and sell it under their own branding. It can also be a part of white label BI tools, where companies integrate a solution within their own application.
White labeling will prove particularly valuable to startups looking to gain market share quickly and with fewer logistical or financial costs to consider. If the framework for a platform or development is available right out of the box, startups can focus on their value proposition, strategy, and branding rather than starting from scratch. In practice, BI dashboard software can be used as a SaaS solution that is completely white-labeled and adjusted to the specific branding needs of a company or department.
Low-coding solutions are out-of-the-box style data centers (SaaS platforms for SaaS platform providers, if you will) that won’t eliminate the need for developers or engineers.
However, having less code to write to form the foundations of your platform or solution means that technical staff or contractors can spend more time driving innovation or sweating the stuff that results in a real competitive edge.
For example, you can implement a BI solution that is completely adjustable to your industry and department and relieve your technical team of endless supporting tasks. That way, they will have more time to focus on the development and engineering itself, which will, ultimately, bring sustainable development to your business.
Low code and no code innovations continue to develop and emerge based on rising market demand. According to a mix of studies, businesses across sectors (startups, in particular) are opting for ‘low code’ solutions for the following reasons:
- To accelerate digital transformation and innovation
- To reduce their current IT or technical backlog and boost responsiveness
- To drive down the necessity for or dependency on hard-to-hire technical skills
- To protect the business against aggressive technological churn
- To improve internal processes
As one of the most all-encompassing SaaS market trends on our list, the low-code revolution is worth monitoring in 2024 - especially as new providers are rising from the digital woodwork almost every month. Oh, it’s also predicted to be worth $187 billion by 2030.
This is an exciting SaaS industry trend that is worth embracing if you’re looking to create a new platform or enhance an existing solution.
12) Greater focus on customer success
As SaaS market growth continues to accelerate, SaaS platform providers are working on many ways to offer maximum value to platform users by putting more effort into understanding the customer journey and providing better experiences to enhance engagement and retention. To do so, they focus on customer success metrics to measure their strategies. But what does customer success actually mean in SaaS?
Customer success in SaaS can be defined as the decisions and strategies providers make to ensure customers are successful when utilizing their software. This is especially important in the SaaS industry as, unlike other companies focusing on sales, SaaS companies depend on returning customers to survive and grow. In that sense, customer success in this industry lies mainly in ensuring a great experience through an integral approach that goes from product development to customer service. In short, it means that if the customer succeeds, the business will succeed, too.
Experts believe that, in 2024, decision-makers in the SaaS industry will consider customer success as a key element to ensure business success. Some key actions that should be taken to achieve this are to connect general business goals to customer success strategies, anticipate customer challenges and provide efficient solutions, improve customer onboarding, provide regular product updates, and gather customer feedback, among other things.
SaaS companies that want to be successful with this approach in 2024 will need to rely on technologies and innovative thinking. For example, some providers already use artificial intelligence and machine learning to analyze massive amounts of customer data and understand behaviors to provide tailored experiences. Others use AI to automate several processes and tasks, like follow-up emails or AI chatbots.
This development means that many existing platforms and emerging innovations will come equipped with fully customizable features and tools that provide access to a wealth of insights designed to help customers achieve their goals and needs. In addition to amplifying the inherent value of SaaS offerings, an increased focus on customer success will also result in the likes of personalized onboarding tutorials & videos, better mobile optimization, and advanced platform feature notifications.
Considering that 72% of companies report improving customer success as one of their top priorities. It is impossible to ignore the power that this trend will have this year and beyond. The customer success management industry is expected to grow at a CAGR of 24,73%, reaching 10.6 million in 2031. Inspiring and incentivizing providers to lead with user value at the heart of their innovations, ideas, and operations.
Enhanced SaaS Solutions For 2024
These 12 essential trends in SaaS will shape the landscape in 2024. Many developments have spilled over from last year, and some have evolved, paving the way for brand-new concepts that will propel the industry to dizzying new heights.
Artificial Intelligence-empowered SaaS, advanced ML capabilities, Vertical SaaS, the rising need for and development of API connections, increased thought leadership, a migration to PaaS, a plethora of niche vertical offerings, increasingly accessible martech solutions, expansive low-coding capabilities, and cross-platform organization innovations are here to stay. These forward-thinking concepts will change the face of BI across sectors in the years to come.
Above all else, these inspiring SaaS industry trends promise a progressive future for the industry. Today’s businesses and consumers command robust, accessible, and valuable software-centric solutions for a range of tasks, goals, and outcomes. As digital transformation continues to accelerate globally, the SaaS industry can only get stronger, backed by the kind of ideation that provides a simpler, smarter future for all.
As data continues to be the driving force behind smart business strategies in a digitally dependent world, SaaS options are now positioned as an increasingly convenient and affordable option across industries.
All signs indicate that this coming year will be an interesting, trendsetting year for the trends in the SaaS industry. Of all the developments currently in the pipeline, these 12 SaaS industry trends, in particular, show signs of standing out as the most significant in the coming year. To keep your mind fresh, here is a rundown of the 12 SaaS trends for 2024.
- Artificial Intelligence
- SaaS security as a priority
- Vertical SaaS
- Data-as-a-Service (DaaS)
- Migration to PaaS
- SaaS market consolidation
- More SaaS superapps to emerge
- iPaaS for enhanced connectivity
- New pricing strategies amid cost increase
- The growing need for API connections
- Low-code capabilities
- Greater focus on customer success
For more digitally-driven insights, check out our essential guide to getting started with big data analytics and business intelligence dashboards —essential reading for go-getting modern businesses of all shapes and sizes.
It’s time to level up! If you’re ready to grab the future of SaaS by the digital horns and benefit from your own data-driven software-as-a-service solution, try our 14-day free trial and make innovation, intelligence, and growth your priorities in 2024.