Like any industry, the technology field goes through trends. Over the recent past we’ve seen the cloud, digital transformation, smart technology, the metaverse, and artificial intelligence (AI) as flavors the of the month (or year).
Software as a service (SaaS) was once the new kid on the block as well. Yet because the cloud and AI seem to get most of the attention these days, some can forget about the importance of SaaS and how it’s only getting stronger.
Gartner has forecasted that SaaS implementation will grow by 16.8% in 2023. Also this year, the global SaaS industry is estimated to be worth over $60 billion. Much of this continued SaaS demand has been driven by businesses requiring more niche technology services.
But SaaS also remains appealing due to the efficiencies and cost savings it delivers. Not so long ago, enterprises had no choice but to buy expensive software for functions like business analytics, customer relation management (CRM), and automation.
All of that changed with SaaS. Now, with the cloud, enterprises could reap the same technological benefits at a fraction of the cost – and improve performance at the same time. In fact, with the emergence of SaaS, they could utilize virtually any type of application they required without needing the personnel to build or maintain the technology. Those factors created the original appeal for SaaS, and that’s why it’s still popular: SaaS will drive approximately 85% of enterprise apps by 2025.
SaaS has also become vital due to the remote work revolution. With many employees now working in multiple locations during the week, technology has had to adjust to how they communicate with customers, colleagues, partners, the media, and others. SaaS is the fundamental backbone of today’s collaboration and information gathering tools.
Specific industries are discovering how SaaS can accommodate their specific requirements and business objectives. Take healthcare, where SaaS is helping to speed up access to electronic health records. Vertical-specific SaaS apps now foster the needs of the education sector, and can even be micro-specific for the specialized requirements of kindergarten, high school, and university level learning.
SaaS also benefits the people and organizations that build technology, as new uses for SaaS mean more opportunities for providers. For example, many SaaS providers now offer customized packaging and pricing models based on features that meet specific customer needs. In practice, this means they’re unbundling their packages and helping customers overcome vendor lock-in, which is often cited as a major hurdle for SaaS adoption.
There are now more digital opportunities for SaaS, especially with metaverse integration. This is because the metaverse requires flexible networks with minimal latency to deliver captivating user experiences. Accordingly, there’s a good chance SaaS providers will adjust their offerings to be able to function at high levels within the metaverse. To that end, SaaS will likely accelerate the timeline of when the metaverse reaches its full potential.
The rise of super apps is also bringing a massive amount of work – and thus growth – to the SaaS industry. Super apps are either mobile or web applications that provide multiple services, such as payment or financial services, social networking, ecommerce, transportation payments, and more.
As essentially all-in-one applications, super apps allow users to perform multiple, non-related tasks within a single application. The most popular super apps are Ailpay, WeChat, Grab, and Gojek. And since these apps have large user bases, the reliability and connectivity of SaaS is more important than ever.
These are only a few examples of how market conditions will expand the demand for SaaS. To illustrate this point, it’s predicted that the SaaS market could be worth as much as $883 billion by 2029. Part of that growth will be fueled by the ongoing rise in adoption of public and hybrid cloud solutions; another part will be the result of remote work, which will only become more of the norm across the world.
SaaS may have been overtaken by AI as the dominant technology topic discussed on blogs and social media. There’s good reason for that – AI is changing the industry, as well as society at large. But underlying mechanisms like SaaS will continue to play a critical role in the future as well.