Software-as-a-Service (SaaS) is an industry that is experiencing significant growth. Worldwide, SaaS revenue is growing 20% every year and is expected to reach $300B by 2024. With companies like Freshworks filing for an IPO with NASDAQ, Indian SaaS companies in particular are making a global impact. Adoption of SaaS saves time, reduces costs, and helps scale businesses efficiently. As we roll into 2022, here are the top SaaS trends that will emerge.
Artificial Intelligence and Machine Learning will play a much bigger role in SaaS offerings
SaaS offerings will continue to become more intelligent through AI and ML that will help drive customer value through optimization, faster onboarding and an improved customer experience. For example - AI/ML will help in optimal decision making and in driving automated actions (such as automated advertising budget allocation, bid management, and ecommerce supply chain forecasting) thus drastically reducing the time spent on taking optimized actions compared to a manual or human-based system. Similarly, AI models will help learn patterns in underlying data and customer usage to provide personalized out-of-the-box recommendations that can improve the customer experience and reduce time to value.
More Vertical SaaS firms will grow and win businesses across sectors
In the early days of SaaS, companies could scale by solving a common problem across multiple clients and industries. As industries, like e-commerce, have scaled, their needs have become bespoke and nuanced and they are willing to pay for software that solves problems specific to their needs - as a result, we will see an increased number of SaaS offerings that will be targeted to a specific industry as compared to a cookie cutter approach. The benefits of deploying an industry-specific SaaS as a customer is immense as these offerings solve specific sets of use cases much more deeply and hence provide a greater value and ability to scale. Companies like Veeva Systems have scaled well as a vertical SaaS company and there will be many more to follow in 2022.
Product led growth will gain strategic dominance across SaaS companies
A successful SaaS company depends on a mature land-and-expand sales strategy. This means that as a SaaS provider you should have a working strategy to grow your customers' value and drive revenue growth through existing customers. This can be driven by offering a suite of products to upsell, or driving more usage and pricing your product on usage. Companies that can drive this growth in value and revenue through product (rather than only by acquiring new customers) have a powerful companion to the sales and marketing team to unlock scale. Products like Zoom, Slack, Figma have all seen immense success with a product-led growth strategy. Similarly, within e-commerce, SaaS platforms that solve issues across multiple domains like supply chain, sales & operations, advertising, and promotions management within one integrated tool will be better poised to grow through product network effect. This trend will continue in 2022 as companies look for ways to scale in a competitive environment.
Low/No code SaaS will continue to grow across all sectors
Low-code and No-code SaaS has grown significantly in the last few years. This is primarily driven by the fact that every company has the need for workflow automation that can drive productivity improvements. Many companies do not have the tech team to do it while many others are too bandwidth constrained as they scale their setup. This trend will continue to strengthen as many companies will adopt low to no code SaaS offering to automate workflows and improve productivity.
SaaS firms providing API, Data or Cloud integrations will grow in prominence
Integrations with different data sources, APIs or cloud providers are key to building a scalable data and computation platform as these platforms are the heart of a company’s IT infrastructure. Working with API, data and cloud integration software services can significantly reduce the time and effort to build a data lake and intelligence system for your company that unlocks the value of the data. As a result, such SaaS providers will grow in prominence.
SaaS is growing in prominence in 2022 and beyond. The next stage of SaaS evolution will belong to AI/ML-driven intelligent services, more industry-specific and targeted offerings, services that will drive end-to-end automations with Low to No code, offerings that will use a product led growth strategy to drive sales & cloud management and data integration services.
Prasun Kumar is the vice president of engineering and head of India operations at CommerceIQ.