With the evolution of cloud technology, SaaS enterprises have grown into a whole industry of strategic business developers. Eighty percent of businesses already use at least one SaaS application, and the industry is continuing to expand into new areas and micro-niches.
What is SaaS and why is it important in 2023?
SaaS (Software-as-a-Service) is a business model, which offers access to software on a subscription basis. Additionally, the software is hosted on external, rather than in-house servers. This type of service can be accessed via a web browser, and requires the user to make a personal account. Rather than installing the software onto the actual device, the user can access their account via any web browser on desktop and mobile. Some of the most popular examples of SaaS products include Dropbox, Google Workspace and Slack.
This sort of service carries a number of advantages, including different subscription levels based on demands, which means it is a scalable service that does not require significant investment, it does not take as much disk space as installing a software onto the device, and it is very simple to use. SaaS solutions frequently provide thorough demos and instructions, making them accessible to anybody who is not necessarily a professional in a certain industry.
What are the prevailing and emerging trends in this field?
Statistics confirm that users really enjoy using SaaS products, due to all the benefits mentioned above. The Software-as-a-Service (SaaS) industry is expected to be valued roughly 146 billion US dollars in 2021, rising to 195 billion US dollars by 2023.
As enterprises throughout the world use SaaS solutions for a range of business purposes, the overall SaaS market is likely to continue expanding. Among these are customer resource management (CRM) and enterprise resource planning (ERP) systems, as well as web hosting and eCommerce.
Vertical Saas and micro-niches
One of the trends that are going to dominate the SaaS industry in 2023 is Vertical SaaS. This business model caters to a specific industry and niche only, as opposed to the Horizontal SaaS, which is applicable to all users, regardless of the industry, such as employee communication platforms like Slack.
Due to the increasing usage and emergence of new niches in the SaaS industry, the Vertical model is becoming more feasible and successful. A great example is the Healthcare industry, which uses patient management systems to manage their administration and monitor their patient’s medical history.
The benefits that come with the Vertical SaaS model include better integrations, which are more applicable to the specific industry, and can be improved based on the needs of the micro-niche. Additionally, the vertical system offers a higher return on investment and lowers the costs of acquiring new customers, as the pool of customers is more narrow and specific.
Ai and Machine Learning
The use of AI and machine learning is going to continue advancing, in order to personalize user experiences, improve customer service, lower hiring costs and implement new features based on customer behavior patterns. Natural language processing and AI's capacity to learn from prior experiences with users, can enable designing interfaces in SaaS which adapt to the customer's specific needs.
Machine learning may be used to forecast user preferences or behavior, and then trigger warnings or actions when the user appears to be disengaging. Because it can complement SaaS developers' coding skills, artificial intelligence (AI) can be used as an addition to the team. When AI can verify that the SaaS is constructed to scale to thousands of users, deployment time is likely to be reduced from months to days. For example, Oracle has just incorporated machine learning and artificial intelligence (AI) to their cloud security services, allowing for automatic threat identification.
Since SaaS businesses have an unbelievable amount of customer data and information, privacy has become a prominent concern for many consumers. The growth of cybersecurity has demonstrated how seriously consumers and corporations consider privacy. Companies are now starting to adopt security measures preventing unwanted emails and data hacking and protecting payment details as well as files stored by customers in the cloud. It can be concluded that SaaS companies who offer the most security and reliability when it comes to storing files and carrying out very frequent risk assessments, are likely going to stand out and win over their competitors in 2023.
White Label SaaS
Subscription- based, white label SaaS products are going to be another trend that continues to expand in 2023. White-label software is software that a business purchases from a service provider and recreates the identity of a brand as its own. The majority of white label software originates from Software-as-a-Service (SaaS) companies who license out the rights to their software or charge a monthly subscription fee.
As many entrepreneurs are looking for a solution that will get their idea up-and-running quickly without a large capital investment, this is a great solution, as it requires a low level of expertise, is scalable and offers high quality features and functionalities, as opposed to taking many months building your own solution.
The future of SaaS appears to be promising. Current trends indicate that SaaS is not going away or slowing down. Instead, it appears that it will become the future norm for most applications. The trends that appear to be the main focus for 2023 will revolve around continued personalization, use of AI, cybersecurity and consumer protection, as well as diving into smaller micro-niches and very specific industries, which will aso take advantage of cloud computing for their everyday operation, including the healthcare and finance sectors.