SaaS prospects in 2023
April 3, 2023
New day – new topic to discuss. I hope you remember what SaaS is from our previous report. If not, let's freshen this information together.
SaaS is a technology, the essence of which is the use of programs and apps in the cloud. Users pay for the software on a subscription basis. Manufacturing companies provide software as a service.
The SaaS principal benefit is that there is no need to install the program, configure it, and then regularly monitor the quality of its work.
Where's SaaS going, and what should we expect from it?
Today, more than 70% of companies and large developers use cloud technologies to create new products. These statistics allow you to develop hypotheses about the future of SaaS because the market never stands still. Moreover, according to Gartner Inc. forecasts, in 2023, spending on public cloud services worldwide will grow by 20.7% to $591.8 billion compared to $490.3 billion in 2022.
Every year, cloud computing worldwide is becoming more relevant, despite the geopolitical situation. And, of course, we can't ignore it. The cloud permits, for example, to reduce costs, securely store and process information, have access to innovations, make business processes more efficient and work with customers from anywhere in the world.
Increasingly, most software vendors are moving to the SaaS business model because it offers predictable, recurring revenue. Customers also benefit from the flexibility of on-demand scaling and pay-as-you-go efficiency. According to analysts, the industry's pace of development will increase in 2023 due to the ongoing digital transformation of enterprises and the transfer of workloads to the cloud.
Authoritative reviewers declare that by 2025 more than 80% of all used software will be distributed thanks to SaaS, but what else can we expect in the future?
To answer this question, we've collected several popular trends in the field of SaaS technologies. After reading them, you can learn what we're waiting for in the future. Working with many clients and developing new solutions, we came to the following conclusions about the SaaS trends in 2023; please welcome them:
Popularization of individual solutions designed for a narrow circle of users
The software is a reliable and multifunctional tool in the hands of specialists. Commercial software is developed with a vast user market in mind. Therefore, it offers unification in many aspects and without unique solutions. Whereas what about enterprise software?
One of the main trends in SaaS these days is the creation of cloud-based software designed for specific tasks and specific companies. Such software is created by a company for a company and won't be distributed to general users. At the same time, a unique SaaS solution for professionals in demand in the market can turn from software for corporate needs into software for the general market and become one of the company's products.
Modern IT technologies can significantly reduce the cost of software development. It means that creating your software becomes more profitable. Remember the high level of competition in the IT market. Many people need unique solutions and capabilities to beat the competition, and SaaS is ready to give you that.
The distribution of enterprise software through SaaS is one of the most discussed trends. Given the ability to create unique software for enterprise needs and then provide it as a finished product for a broad market, it isn't surprising why SaaS technologies are so eagerly interested in the most prominent software developers. Following this trend, any company will be able to achieve more because, given the popularity of SaaS, this technology is the future.
New ways to keep users inside SaaS
Companies that provide users with access to their products based on SaaS always strive to reduce customer churn percentage. User retention percentage is calculated based on the total number of users using SaaS, while user churn percentage is calculated based on the number of canceled subscriptions.
To minimize SaaS losses, companies use various retention methods. Among the most effective, especially prevalent, are:
- pay for use at the end of the year;
- new feature notifications through various marketing channels;
- opening AI technologies for users and an increased and immediate level of service.
The listed methods of retaining users have been used for more than a year, and today, we can confidently say that they need to be more. That's why one of the leading SaaS trends this year is investing in personalization.
A personalized approach to each client is a fantastic opportunity for SaaS companies to achieve maximum customer loyalty at a minimal cost. Personalization tools can be name-calling, welcome videos, and even information for the user provided after analyzing their search queries.
Some targeted advertising inside SaaS can allow companies to significantly expand the circle of their regular users and offer them the highest level of service. Thus, personalization is one of the most significant and prominent trends for SaaS in 2023.
Growing demand for Shared Access Software
As everyone knows, quarantine restrictions have shown the whole world how useless the office is and how working from home is highly effective. With such work becoming increasingly popular, the SaaS consumer market demands shared work capabilities, which developers are trying to provide.
Sharing software in a company environment will allow employees to share the necessary materials and simultaneously work on the same project while being thousands of miles away from each other. It's already possible to implement such access now. And some companies even offer such an opportunity to their customers.
Following the pioneers, other developers are trying to implement cooperative access to projects using SaaS-based software, but only some succeed. In 2023 we're waiting for a sharp jump in the popularity of software with cooperative access. And we can't wait to see a simultaneous boom of such software in the IT market.
Artificial intelligence in SaaS
Artificial intelligence itself is nothing new. At the same time, by combining SaaS and AI, developers can achieve unprecedented results.
Artificial intelligence today can cope with many tasks. With enough information, AI can automatically adjust color correction during photos on a smartphone and even create text. You can achieve more in all directions by implementing AI in SaaS.
SaaS software with embedded artificial intelligence will be able to prompt the user on what exactly needs to be corrected during text processing or creation. At the same time, AI is trainable, which means such functionality can replace users with a personal consultant on almost any issue. Of course, a full-fledged replacement of assistants seems close, but the quintessence of AI and SaaS can become a real breakthrough in the industry, and the developer understands this.
That's why dozens of SaaS companies are now incorporating AI technology into their products to achieve better results and attract more customers.
The ever-growing popularity of SaaS
It can't be denied that SaaS is constantly growing in prominence, with over 88% of businesses using at least one cloud computing service. The pandemic and subsequent changes in the world have negatively affected many industries but allowed SaaS to gain well-deserved popularity. Thanks to the possibilities of sharing software and the further development of technology, we can safely talk about the big future of SaaS software.
There is no doubt that SaaS is a highly relevant trend, and the statistics confirm this. The fact that most developers use at least one cloud computing service suggests that the trend will continue. Based on this, we can talk about the long-term future of SaaS and companies involved in cloud computing services.
Each of the trends we've mentioned directly impacts the case in the IT industry. Prominent developers, new companies, and hundreds of directions – SaaS is necessary for everyone.
The high level of competition and the presence of principal players somewhat hinders the development of SaaS technologies. At the same time, the existence of companies that have huge profits from SaaS motivates developers to create something entirely new.
It has yet to be determined what the SaaS technology industry will be like in a few years. At the same time, SaaS is an auspicious and demanded direction, and companies using SaaS products use the most relevant solutions. Please don't hesitate to contact us if you want to understand this topic better or have ideas you'd like to implement. And our specialists will help you with pleasure.