23 Staggering SaaS Industry Trends

Software as a Service [Saas] is something that many corporations, large and small, are considering to make their processes more efficient. These are the industry trends that emerging for the next 5-10 years that you will want to know about so you and your company can adapt to the changing times.

According to a recent Cisco study, 75% of enterprises polled mentioned they didn’t have a full organization cohesive cloud strategy in place. The same study showed that roughly 83% of enterprises are looking to work with major cloud MSP’s to carry out their current operations in the cloud.

What does this mean? That technology gaps are forming. It means employees are trying to find their own solutions to the issues they are encountering instead of enterprises coming up with a formal policy. The end result is a “Shadow IT” empire that may not offer official statistics to analyze, but still offer a comprehensive level of revenues and growth for the SaaS industry to consider.

Data Security Will Continue to be a Primary Concern

  • In the next 12 months, Inc. reports that the Bring Your Own Device market is expected to exceed $181 billion in total revenues. About 2 in 3 employees are already using their personal devices at work, which allows them to access personal and business data with the same device.
  • Because of the Shadow IT market which also exists in the SaaS industry, this makes it difficult for many employers to be able to track which employees have specific data and what device that data happens to be on.
  • Internal IT departments are noticing data security issues that are becoming increasingly difficult to counter because so many employees are using their own devices – sometimes voluntarily and sometimes by mandate of the organization.
  • Look for more enterprises to embrace cloud-based applications to begin sorting out the security issues that these personal devices are creating. Not only can these applications help to elevate security levels within a company, but new security protocols can be instituted for data management and maintained by a third party that has more potential resources and industry wisdom to protect sensitive day.
  • SaaS discovery tools will also see an increase in use in the next 5-10 years as companies work to locate employees who are bringing in their own IT solutions in order to do their work. In the end, when this industry can show companies that they can lower costs by instituting meaningful SaaS technologies, policies, and procedures, the opportunities for growth could expand exponentially.
  • Watch for the industry to meet these needs by allowing businesses to pick the specific subscription services they want to meet their needs. Instead of bundling combos, look for unbundled combos so that a cherry-picked set of services can be installed.
  • In order to provide these single-service needs, watch for companies to spin-off or new start-ups to come online that provide very specific services.

Hackers are always finding new and innovative ways to access proprietary data. Without data security solutions that are streamlined, companies are forced to rely on the personal knowledge and security protocols that their employees are able to provide. SaaS will help to tailor individualized solutions to these companies and provide many growth opportunities, but only if the third-party services can be marketed effectively. Watch for the next 5-10 year period within this industry to focus on targeting small demographics to promote individualized solutions to grow B2B opportunities for all sizes of companies.

Application Program Interfaces Will Continue to be Important

  • Not every company is going to want to completely migrate their data into a SaaS solution. Some are just going to want a service solution that works with their current infrastructure so it can be better.
  • This will create a section within the SaaS industry where the needed to develop standardized APIs will become necessary. Not every employee is going to understand how these software solutions will help them complete tasks every day or meet company goals, but they will need to know how to use data to their advantage.
  • Look for pre-purchased insights to become a priority for companies that are looking for integration instead of migration needs within the industry. This will require those who provide SaaS to look at overall capabilities, application integration that includes legacy data systems, and better data protection.
  • There will also be a need for the SaaS industry to work with legacy systems that could be quite large, yet be able to fully integrate without causing a data leak or breaking something unintentionally.
  • Automation will also be a point of emphasis placed on the SaaS industry. This is due to the rising minimum wages across many sectors, including within the industry itself. Think about it like this: instead of a grocery store having 6 cashiers manage a customer checkout, one cashier can manage 6 self-checkout stands instead. That’s what the industry as a whole is going to need to do as everyone looks to subscribe for their needs instead of hire for them.
  • Mobile will also be a necessary component of most APIs. Employers need their employees to be very mobile these days, even if the main office is based in a cubicle farm. Employees also like the flexibility of being able to access work needs from home, so productivity tools that can help facilitate this process can lead to a more efficient business operation.
  • The bottom line for the industry in this area is simple: they will either need to disrupt the competition by providing forward-thinking services or they will be run over by the companies that are. Businesses are looking for the best of the best for their data needs. Being second-best won’t be good enough any more.

As news stories about data breaches, leaks, and other security concerns continue to add up over time, companies that have never thought about SaaS are going to approach the industry for the first time. SMBs will also be looking for affordable solutions. Some of these companies could be using antiquated data collection systems, but will have the expectation that the data integration or migration happen quickly and seamlessly. This will be the greatest challenge for the SaaS industry over the next decade. It may inspire revenue growth, but there will be a certain risk to obtaining those revenues that not every provider in the industry may be willing to take on.

Quicker Growth, More Funding, and Confusing Apps

  • According to reporting from Tech Crunch, SaaS companies are expected to trade at 5x revenue while growing at 30% year over year for the next decade. Many successful SaaS firms are alrady operating on an operational rule of 40%.
  • Forbes reports that 59% of all cloud workloads will be SaaS-based by 2018. That’s up from 41% in 2013 and compared to 28% of cloud workloads being IaaS and 13% being PaaS.
  • There are also 3.97 million apps available for purchase or download between all operating systems, which means employee confusion may result based on app selection for SaaS needs.
  • This has created a trend where the SaaS industry must successfully integrate with apps in applications that may be similar, but competing in nature. By doing so, a company can accomplish what they need to do without the fear of a production laps, a communication issue, or a data security issue.
  • To compliment the software being offered, look for SaaS providers to begin looking at providing data as a service to their markets. This would allow companies to have a large volume of cloud-based data that can be maintained at a smaller cost to them, while still being able to mine that data effectively for higher profits.
  • Data as a service is expected to grow by 23% through 2019 to reach $48.6 billion in spending according to an analysis by IDC.
  • Forbes also expects that public cloud solutions will seen 30% CAGR growth through 2018 when matched with the utilization of open source solutions.
  • Watch for companies to eliminate internal IT departments and their higher costs for the solution efficiencies of data and software as the industry continues to innovate processes that can create individualized streamline solutions.

The SaaS industry is certainly going through a major growth cycle right now. This growth cycle may continue to last for a decade or more, especially as more companies discover the advantages which come from collecting and maintaining big data. The only problem is that SMBs don’t really have the ability to maintain that level of data on their own. With this industry creating individualized solutions that can be maintained through third-party connections and added security protocols put into place to limit concerns that are created through the use of personal devices, it’s not just the SaaS industry that will benefit. It is every company, every industry, which embraces these data production and management advancements.


Saas Industry Facts