You are responsible for your SaaS business’s growth, improvement and success. But as an entrepreneur, you must also deal with countless tasks and face so many situations and issues that the significant things can be overlooked. One critical area that may remain in the shadows while you resolve routine problems is SaaS industry trends.
Here, we refer to trends in both global and local markets. Global trends can provide you with a clear vision of what is going on in the industry and how you can maintain your company’s position in a rapidly changing business world. Local market trends give you an understanding of what local SaaS businesses look like—what particular customers want and how your competitors are trying to fulfill their needs.
Today, we are going to open a new chapter in your book of SaaS achievements. Here, you will read about:
The super-hot trends in the global Software as a Service market;
And how these trends can help you improve your company and generate more revenue.
Key reasons to follow emerging Software as a Service ideas
Before diving into technical specifics and tried and tested business tactics, let’s consider the reasons why businesses should follow the hottest trends:
SaaS adoption rises
Annually, businesses are spending more and more money on SaaS. In 2018, total SaaS spending rose to more than $340,000, 78% more than back in 2017. SaaS products can be applied in small, medium and large companies and provide assistance in every department.
From a financial perspective, the SaaS business is more advantageous than ever before. And if you follow the trends in SaaS market, you can get a chance to enjoy a piece of the pie.
Software solutions turnover is crazy
Can you believe that business app turnover is higher than staff turnover?
The typical agency changed 39% of the apps it uses in the last 2 years! Companies don’t hesitate to opt for another solution if an opportunity appears.
This is reasonable: businesses are always looking for a better, more advanced products, and there are a number of existing offers to entice companies to try new apps.
It’s becoming harder to retain customers. Thus, the cutting-edge techniques and the most popular SaaS trends should be employed to keep existing customers’ attention and win the hearts of new clients.
Competition gets more intense
The points above have led us here. As the industry grows, it attracts more investment and reaches new financial heights. Meanwhile, customers entertain new offers and are more than willing to try new apps. As a result, competition has risen rapidly. A typical SaaS company has 9 competitors, and one survey shows that some have more than 11 competitors! In 2013, it was difficult to find a company with more than 2-3 rivals.
Intense competition doesn’t mean you should start worrying about your company’s future. It is just one more reason to stay aware of industry trends and employ them as you forge ahead.
Hottest SaaS trends to follow in 2021
Now, let’s look at the SaaS development trends attracting the most attention. If you follow them properly, you just might get a chance to reach the top.
1. Artificial Intelligence for business needs
In this discussion of SaaS trends 2021, AI deserves to be mentioned first. Since the 1950s, this side of technology has attracted enormous attention and opened horizons previously deemed science fiction. We agree that forecasts of AI are quite diverse: there are positive predictions as well as risks and warnings. However, we must face one fact: AI is one of the most innovative things in the modern technology market. It has already brought numerous advantages to users, companies, and industries.
As software engineers work on brilliant AI software, entrepreneurs shouldn’t hesitate to invest in cutting-edge solutions. The Siri assistant on your iPhone is just the tip of the iceberg: in 2021, you can actually employ AI technologies to upgrade your Software as a Service business.
Some industry leaders have already illustrated the perks of AI application.
Salesforce succeeded in bringing their users closer to AI back in 2017. It made the company’s position in the market stronger and provided us with a brilliant example of how AI can serve SaaS processes. Salesforce Einstein allows you to build more intelligent products, make more accurate predictions, augment company processes, employ deep learning models for business improvement, and more.
Did you know that AppZen is one of the fastest-growing SaaS companies? We believe one of the reasons for this accelerated growth is that the company employs AI to automate processes. The AppZen AI platform investigates employees’ expenses, reveals fraud and company policy violations, and contributes to the overall system security.
2. Blockchain and SaaS
There is so much hype around blockchain and decentralized databases that some of the facts sound almost unreal. However, blockchain technologies are undeniably real and revolutionary. These days, you should associate blockchain with more than bitcoin-connected topics. The technology can be applied to many industries, including SaaS.
SaaS companies are built on trustworthy transactions and transparent cooperation.
Decentralization and blockchain can introduce even more transparency to the industry.
Unlike a traditional database, where data theft is nearly inevitable, blockchain can empower companies to prevent any sort of fraud. In addition, blockchain can guarantee your company’s reliability and win you more loyalty among existing and potential customers.
Blockchain as a Service solutions have become a reality. One such solution is Leonardo by SAP. Their decentralized blockchain cloud services implement blockchain principles within your SAP project and develop blockchain apps.
This is a cloud-based product management tool developed on a blockchain basis. It associates each product with a unique ID, something that’s enormously helpful in the Asian market: this blockchain asset is helping to eliminate counterfeiting.
3. Vertical SaaS
As competition between horizontal and vertical SaaS products reaches a fever pitch, we can assume vertical SaaS will continue to trend in 2021.
Unlike a horizontal approach, which attempts to cover as many fields as possible, a vertical SaaS strategy focuses on specific needs within an industry and allows getting closer to the potential client.
We’ve identified three main reasons why vertical SaaS has become such a trend.
By specializing in a particular niche with more precisely defined target audience, vertical SaaS providers can launch more successful marketing programs. Business owners know what their potential customers like or hate, what social media channels they use, and what marketing tips are most effective. Vertical SaaS also enables more opportunities for cross-selling and upselling: you as a business owner know what products to bundle and how to win customers’ hearts with special offers.
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The resources say that average customer acquisition costs differ greatly when comparing horizontal and vertical solutions.
More opportunities for business extension
By catering to more specific requirements, you can deliver greater business value. At the same time, in a modern market, the majority of solutions try to cover a wide range of needs and be a “one-size-fits-all” solution. As a result, they lose their identities and fail to retain client business.
Vertical products are built on a completely different foundation. The number of specific solutions and potential competitors is smaller.
Vertical SaaS can drive your business with less effort and investment.
A tried and tested way to attract brilliant talents
Software engineers are more interested in unique products than ever before. Often even the salary doesn’t matter as much as the idea or product being built. By starting a path toward vertical SaaS, you’ll be better able to attract great IT talent and develop a truly viable, powerful and profitable product.
Want an inspiring example? Consider the Veeva vertical SaaS solution for successful workflow management. This product targets pharmaceutical companies and is now considered one of the fastest growing businesses worldwide with a global capitalization that exceeds $20 billion.
4. Alternative payment model
The subscription-based model has served SaaS companies well for many years. Its simplicity and reliability should not be overestimated. You may wonder, what is wrong with this tried and true payment model? Well, we believe you know the answer to this question: these models may limit certain needs and deter customers who only want to pay for the resources they use.
To attract new partners and better cater to existing clients’ needs, you should stay abreast of another emerging trend: the pay-per-use (PPU) model is the new kid on the block. The model creates positive conditions for fast business expansion. You can even combine it with a subscription-based approach to give your clients a choice.
Before trying the pay-per-use model in your business, consider these tips:
First, make sure your customers are ready for changes;
Analyze your metrics and determine which payment model would serve you best;
Typically, the PPU model works best for companies with a well-established client base.
5. Open API
Our experience has demonstrated one significant fact: not all customers want to migrate their data to external or cloud databases. Some business owners want to integrate and improve SaaS apps with their own processes. The demand for this hybrid support is huge, yet a very low percentage of SaaS companies have actually taken steps to cover this demand. And these companies will win leading positions.
This is our next trend in SaaS industry: open API and extended integration features. By empowering clients to use one part of your SaaS product functionality, you can attract more customers, satisfy their wishes in a better way, and demonstrate your value over other competitors.
6. A remarkable brand
How does the perfect business work? We believe the perfect business concept requires a continuous flow of both new and returning customers. However, even the most expensive marketing programs and experienced sales professionals cannot create these ideal conditions. But your company’s brand and focus on customer success can. Thus, we have added a strong brand to our SaaS trends chart.
As we mentioned earlier, the industry’s fierce competition can ruin plans, ambitions, and potential. When lead generation isn’t delivering and SMM has stopped bringing in expected conversions, that likely means it’s time to work on your brand. Demonstrate your company’s unique selling points and differentiate your business over competitors.
Here are some tricks that may be helpful:
Design a new, catchy slogan and logo;
Develop your corporative social media profiles;
Partner with local bloggers;
Improve human connections;
Use on affiliate programs.
7. Mobile experience first
Are you ready for some shocking numbers?
On average, we each check our smartphones every 12 minutes. That’s 5 times per hour or more than 80 times per day;
Reports show that people spend more than 4 hours a day staring at their smartphones; that’s more than 120 hours a month;
Over 3 hours per day are spent in mobile apps.
The mobile galaxy is the Promised Land of prosperous business development. This is why mobile experience is the next trend to be aware of in 2021. To keep up with key SaaS trends and deal with the challenges of mobile, you must:
Draft a clear vision of a business app that will address your potential partners’ issues;
Work with competent mobile developers who can create a high-quality product;
Conduct A/B tests that discern your customers’ preferences.
8. Pricing policy changes
SaaS companies need to focus on pricing in 2021. Surveys show that in 2018, pricing policy changes lead to glorious results. 98% of companies reported an increase in accounting rate of return.
Pricing is one of the best ways to increase revenue. That’s why it’s earned a place on our SaaS industry trends 2021 list. By creating a special pricing committee and delegating your pricing tasks to a team of professionals, you can improve established processes. Representatives of different departments can work together to build a more profitable pricing model.
9. Human relations is the SaaS trend that never changes
In the constantly changing world of SaaS, human relations often deliver great value. And this trend has made the list, too.
First, it’s crucial to build solid relations with your employees and partners. Nowadays, recruitment and hiring take an impermissibly huge amount of time. These tasks require an almost unbelievable amount of money and attention. It is much more efficient to retain current colleagues than to look for other candidates. As a result, it’s becoming trendy to be a trustworthy, reliable and loyal employer.
Along the same lines, it is much easier to sell products to existing customers than freshly acquired ones.
If you focus on seamless communication and completely satisfying every client you work with, you will earn greater customer loyalty and strengthen your industry position.
We believe the decision to try new and trending tactics can be difficult, but remaining aware of industry’s trends is crucial.
Our top list of SaaS ideas 2021 edition includes:
Migration to mobile;
And human relations.
How do these trends compare to your current processes? Do you need an upgrade? Or would you rather stick with old-but-gold tactics?
Not sure we covered everything? Check out our post on the web development trends of the coming year. This article will provide you with even more ideas to improve your SaaS business.
If you want to discuss any of these trends or how you could implement them in your own business, just let us know. We know how to make businesses better. Take your first step and join our growing network of SaaS trendsetters!
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