With the allure of lower running costs, flexible payment options, easier deployment, improved security and scalability, as well as painless upgrade paths, Software as a Service (SaaS) has steadily been increasing in popularity year after year. In fact, SaaS has become so popular that it is estimated that it will account for approximately 60% of public cloud spending by 2020.
With so much interest in this market, new trends are emerging all the time, but over the past year we’ve noticed that SaaS developments have mainly centred around the following:
- Increased (artificial) intelligence
SaaS platforms are increasingly making use of AI technologies to allow businesses to speed up, refine and personalise their business processes. Within customer service, chatbots are being used to answer standard questions and route issues. AI is also being used to automate the identification and remediation of security threats, to automate menial tasks previously performed by humans, and to create customised customer experiences based on customer preferences and trends.
- SaaS variations
Where previously SaaS solutions tried to offer something for everyone by creating applications that could be used across any industry, we’ve noticed a trend toward solutions that zone in on a particular industry, offering more focused and customised solutions within a particular market or niche. This is being referred to as “Vertical SaaS”. Another new term within the SaaS space is “Micro-SaaS”. Typically, Micro-SaaS products are created by small development houses that build add-ons or complementary tools to existing SaaS products. These companies spend their time evaluating SaaS products with the goal to identify missing features or areas of improvement and then create something that will fill that gap.
- Evolution of PaaS
Platform as a Service (PaaS) has become an emerging trend as SaaS companies start focusing on customer retention as a key strategic goal. PaaS offerings allow businesses to build their own custom add-ons and applications, ensuring that the solution is more responsive and better suited to their specific needs. With custom add-ons and applications come long-term customer buy-in, allowing the SaaS provider to focus their energies on new product developments of their own.
- A shift to transaction-based costing
Traditionally SaaS costing models have been subscription based. This meant that a monthly or annual cost was agreed between the SaaS provider and customer, with the customer having the option to cancel their subscription once services were no longer required. But what we’re seeing now is a shift to a transaction-based or “pay-per-use” costing model. This of course doesn’t work for all industries but has proven to be a popular choice where processing volumes are an important cost consideration. For those companies who prefer a set cost which can be planned for upfront, this will not be a preferred costing option, but for those who want to leverage seasonal or cyclical usage, this model will definitely be more cost efficient.
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