Companies across the SaaS industry saw record growth over the past two years. It is one of the fastest growing segments of the broader IT sector, and these cloud-based solutions have become essential for both businesses and individual consumers as they adapt to an increasingly virtual world.
This quick industry growth is one factor making SaaS recruitment more challenging than ever. The pressing question on the mind of many SaaS organizations now is: What’s next? Tracking the trends and shifts that are happening now is the best way for industry leaders to keep the impressive growth of the past two years going into the future.
Increased Focus on SaaS Security
One common myth about SaaS programs compared to on-site software and systems is that they’re at greater risk for hacks and other data breaches. These issues are rare, and there has yet to be a major issue with compromised operations, despite the sharp increase in SaaS offerings. Even so, reports of technical issues by major players like Google, along with high-profile breaches like the 2019 incident with Imperva Security, has some companies wary of relying on cloud-based applications to handle their sensitive data.
Part of this concern stems from the fact that traditional cybersecurity measures like firewalls can’t be used with cloud-based software. The interconnectedness of these cloud-based applications compounds the problem. Having all of your workplace software linked is convenient for the team, but it also means a hacker who accesses one program could potentially get into the entire system. Beefing up the built-in security protections within SaaS networks can help to assuage these concerns and drive adoption among hesitant, security-conscious consumers.
Expansion of AI and Machine Learning
The AI market is booming in its own right, expected to reach a valuation of $1.8 trillion by 2030 with a CAGR of over 38%. As AI technology has expanded and become more accessible, its use in SaaS offerings is expanding, opening up even more potential growth avenues within the sector.
One common use of this technology today is to provide data alerts for users of cloud-based software. Algorithms trained to detect patterns and anomalies can automatically alert users of important developments or noteworthy aberrations, giving users immediate updates when goals are met or unexpected issues arise.
Integrating AI algorithms with other technology further expands on its potential for SaaS companies. Using it in conjunction with natural language processing technology allows for more personalized and helpful customer service automations. Intelligent automation can also improve the speed and security of SaaS, streamlining internal processes to make them more responsive and allowing users to detect and resolve potential threats more quickly.
Industry Targeting through Vertical SaaS Integration
Many of the SaaS offerings available now serve a specified function, but are designed to perform this function for users in a variety of sectors. This type of general software has broad appeal, but may not offer the unique functions and customization options required within any given industry—it can be used by a variety of users, but doesn’t completely fill the needs of any of them.
Vertical SaaS changes this. Instead of focusing on the function, they provide service targeted to the needs of particular niches and industries. From the user perspective, that makes these programs more fully functional and adaptable to the distinctive challenges and needs of businesses in industries like healthcare, retail, or logistics. The pre-defined KPIs and customer data from vertical SaaS is focused on the kind of intelligence leaders in their niche need, all from one convenient source. Ultimately, this means lower costs for businesses since they will need fewer programs and less time to achieve the same results. For SaaS providers, pivoting to a more targeted vertical offering can help them to stand out from the pack as software options proliferate.
The Evolution of PaaS
In the early days of SaaS development, many providers didn’t offer full integration solutions as part of their software. Instead, clients needed to use third-party services to link their cloud-based software and integrate it with their on-site systems.
Today’s providers have more integration capabilities than these early offerings, but now many companies are going a step further by transitioning into a platform as a service (PaaS) model. This allows users to build customized add-ons into their service, expanding the functionality of the tools they already use. Embracing this evolution can help SaaS providers retain loyal customers despite the plethora of new options that are emerging.
What’s Next for SaaS?
The SaaS industry has already evolved significantly from where it started at the turn of the millennium. The sector is dynamic by design, embracing agility and emerging technology, and that’s likely to be true as the industry continues to grow. Staying up to date on the latest trends can help companies providing software as a service offer the tools and capabilities their clients want and need.