Software as a Service (SaaS) has quickly become a ubiquitous part of the modern business environment, replacing legacy systems and reorienting established workflows along the way.
Indeed, SaaS is in the midst of an unprecedented boom. Gartner expects total SaaS revenues to exceed $85 billion in 2019, a 15 percent year-over-year increase. The research and consulting firm also estimates that SaaS revenue will reach $113 billion by 2021, which represents 100 percent growth since 2017.
At this point, the vast majority of enterprises are embracing some level of SaaS usage with only specialized, proprietary software serving as a significant holdout.
Of course, all of this adoption leads to a natural question—what’s next for SaaS? Major players have established themselves as SaaS market leaders, and many product categories have been filled. Is the market saturated and established, or is there still room for innovation?
I’m leaning toward the latter.
Now that 2019 is in full swing and one of the prominent industry conferences, SaaStr, has come to a close, it’s a good time to explore some of the trends dominaing the space and the natural next steps for continued SaaS integration.
1. Predictive analytics powered by AI and machine learning will change the game again.
Like most technology sectors, how far SaaS will mature is contingent upon AI and machine learning.
Few things are as anticipated and talked about as AI and machine learning, and while each is already making significant contributions to burgeoning new technologies, their impact on SaaS will be uniquely transformative.
Applications with the ability to react to data through machine learning, AI and predictive analytics are equipped to provide data-driven solutions to customers’ problems through more personalized support, process automation and other features. There’s no doubt that we have reached a tipping point where applications will become incrementally and steadily more intelligent to support our needs.
2. New capabilities are possible through advanced interactions.
Currently, customer interactions with SaaS products are relatively clear-cut and predictable. It’s an input/output model where software responds to the demands placed on its feature set as customers use the product, traditionally through mobile or desktop screens.
Meanwhile, the future is smart, dynamic and will be enabled beyond the screen.
As SaaS capabilities continue to advance, solutions will be able to derive data and employees will interact using everything from voice services to cars to wearables. Using the capabilities afforded by artificial intelligence, machine learning and predictive analytics, the data gathered in these interactions will drive workflow and business decisions. Firms will take advantage of this to create better and more capable customer experiences.
For example, healthcare providers will be equipped to provide better, data-driven care through passive readings from wearables. This effectively changes the game for patient care, and it is representative of the broad possibility across the SaaS sector.
3. Customer success management is in play.
Ultimately, SaaS is a customer-focused initiative. It exists to enable companies and their employees to work faster, smarter and better.
One of the next frontiers for SaaS integration involves helping software customers understand and utilize the full expression of software features. This starts by knowing how customers are using the software in the first place. The data produced by AI and machine learning is a great place to start since SaaS companies have more insight and understanding than ever before. Directing that data toward shaping the customer experience is crucial.
To put it simply, all this information is useless if SaaS companies can’t deepen the ways customers use their software solutions so that they wring as much benefit from them as possible.
SaaS is growing, and it will not stay the same. While certain sectors are dominated by established brands, new, specialized niches are continually emerging. This unique combination of dominance and specialization will be navigated by the companies that are accounting for the industry’s changing landscape while getting ahead of the latest trends.