The global tendency to start utilizing cloud environments has been a game changer in the world of enterprise software. Back in the day, companies had to install and manage their applications locally, but that delivery method has quickly grown obsolete. In 2024, businesses prefer to receive their solutions as a service — over the Internet, with all the hardware needs already covered.
The software as a service (SaaS) market was valued at $192.8 billion in 2023, and it’s growing rapidly. In this article, we’ll explore the technologies that drive this expansion and uncover what innovations are already shaping the future of SaaS.
Read on to learn more about the latest SaaS trends and practices you can leverage to gain a competitive advantage.
Understanding the SaaS
To get a deeper understanding of how the trends we’ll discuss impact SaaS specifically, let’s do a quick SaaS industry overview and take a look at several key market statistics.
SaaS definition
In a nutshell, software as a service outlines solutions that are delivered over the Internet. All the infrastructural elements of such software are hosted on the provider’s servers, so customers don’t need to go through the process of installing and maintaining the needed application locally.
When opting for a SaaS app, users can enjoy a seamless experience, with all the updates being handled by the vendor. They can also access the application from any connected device and scale their software easily as their business grows.
Compared to traditional delivery models, SaaS apps are winning, as they are more cost-efficient. In terms of pricing, customers can avoid the expenses associated with maintaining on-site architectures, and they can typically choose the subscription model best suited to their needs.
Key SaaS market statistics
The SaaS landscape is best defined by numbers. Here are some of the most relevant facts and predictions:
- The global SaaS market is predicted to reach over $1,228 billion by 2032. (Fortune Business Insights)
- In 2022, companies were using around 130 SaaS applications on average. (Statista)
- IT and Telecom command the largest industry market share; however, the healthcare industry is expected to demonstrate the highest CAGR over the period 2024-2032. (Fortune Business Insights)
- North America is the largest player in the global market in 2024, generating more than 40% of the worldwide revenue. (Cognitive Market Research)
- North America dominates the market largely due to its key players’ early adoption of AI, IoT, and robotics. (Market Research Future)
Top 7 SaaS trends in 2024 and beyond
Developing a SaaS product always involves chasing down the latest technologies and practices to gain a competitive edge. Let’s explore the top 7 SaaS industry trends that are already shaping the future.
1. Integration of AI and machine learning
In 2024, it’s vaguely possible to find a SaaS company that’s not leveraging artificial intelligence one way or another, and for a good reason. AI has grown to penetrate nearly all aspects of business operations.
- In terms of analytics, predictive AI can help you gain insight into the SaaS future trends that are likely to be a hit, explore customer behavior patterns, asses the effectiveness of your strategies, and guide general decision-making efforts.
- When it comes to optimizing the working process, AI can be a great assistant to your team. One of its main purposes is taking on repetitive tasks and automating numerous processes. By cutting down the manual load that needs to be handled, it can foster more productive collaboration within the team and optimize workloads.
- As for enhancing customer experience, AI-powered solutions come in a wide variety of flavors to help with everything from customer service (via chatbots) to the personalization of interfaces and product recommendations.
2. Vertical SaaS solutions
One of the recent trends in SaaS with strong potential for continued adoption is vertical solutions. These apps focus on a narrow niche and cater to a single chosen industry.
Currently, horizontal SaaS is more well-established on the market, with its prominent representatives being solutions like Salesforce and Slack. However, horizontal products in general offer more standardized functions with limited opportunity for customization and typically higher prices.
Vertical SaaS solutions like Riskalyze and Clio, on the other hand, are better equipped to meet particular and complex industry requirements. As a result, they tend to be more cost-effective and ensure better analytics, performance, and customer experience within specific sectors.
3. Customization and personalization
Top SaaS trends have always included personalization, and the importance of this process has not diminished over the years. In fact, according to Gartner’s 2023 research, 70% of customers are willing to share more personal information with a company to receive tailored service if it saves them as little as 6 minutes of time.
Besides saving your customers’ time, personalization efforts should strive to enable them to obtain more value from your product. This can range from regular customization to venturing one step ahead and accurately predicting each user’s needs in record time, helping you gain more new customers.
To achieve such levels of personalization, SaaS companies turn to analytics of available user data, as well as fluctuating market trends and each target demographic’s preferences. AI and ML, in particular, are extremely effective for processing such volumes of data and providing you with actionable guidelines.
4. Focus on security and compliance
Without sufficient cybersecurity mechanisms in place, SaaS products are vulnerable to data breaches and cloud leaks. Such incidents can affect tens of thousands of client companies and even more customers, delivering a hard blow to both your company’s reputation and customers’ safety.
Besides, any SaaS software must be compliant with privacy regulations such as GDPR, HIPAA, and CCPA, and there is no small number of new laws coming into power as new technologies appear on the market.
The emerging policies aim not only to regulate how personal information is treated in evolving technological landscapes but also to respond to increasing users’ privacy concerns. Modern customers value staying in control of their data. They are also more prepared and willing to exercise their Data Subject Access Rights. For instance, according to Cisco, 28% of customers in 2023 exercised DSAR, presenting a 4% increase compared to 2022.
To gain customers’ trust and make sure you are prepared to follow all the applicable regulations, focus on security from the earliest steps of developing a SaaS application. Make sure to select a cloud provider with up-to-date security policies.
Additionally, consider partnering up with a development company that will help you design your app’s security system and audit for any potential regulatory noncompliance.
5. Increased use of APIs
SaaS development is complex as it is, and one reliable way to simplify and optimize the process is utilizing APIs. They allow you to integrate the necessary functionality into your app by using an existing third-party service — no need to develop it natively from scratch. This approach can be handy for adding payment processing features, integrating with social media, adding maps, and a wide array of other features.
Additionally, as far as SaaS trends go, it’s getting increasingly important to use APIs to enable connectivity between your solution and other tools. After all, there is a plethora of SaaS software solutions on the market.
If a customer gets diverted from your application because of one lacking feature, you are more likely to retain them if your product offers a strong API to seamlessly integrate your tool into their existing ecosystem.
6. Mobile-first SaaS
Going mobile-first is a SaaS trend that is growing along with the prevalence of smartphones in our lives. Just last year, it was estimated that around 70% of the global population used smartphones. As users lean on their phones to do everything from shopping and socializing to conducting business, the expectation to have a mobile version of any software is something to consider when building a SaaS application.
Mobile SaaS apps offer flexibility first and foremost. They’re attractive to customers because they bring all the necessary functionality to users’ most accessible devices.
Additionally, when you include mobile platforms in your development plan, you gain the ability to leverage specific features designed for mobile only, thus not only meeting customers’ expectations but exceeding them.
7. White-label SaaS development
Another one of the latest trends in SaaS is white-label development. White labeling refers to purchasing an unbranded ready-to-go product and modifying it according to your needs: you can change the pricing, design, branding, and other aspects before launching your application or reselling it.
This approach offers quite a few significant benefits, particularly to startups. Building a SaaS product from scratch can require a measurable upfront investment. In some cases, the high costs and the task of assembling the infrastructure, functionality, and design can hinder marketing and strategizing efforts.
Opting for a white-label SaaS solution removes the initial development hassle, enabling you to focus on branding and communicating the app’s value to customers.
Staying competitive within the evolving SaaS landscape
The abundance of SaaS opportunities is proportional to the number of companies entering the market. To stay afloat in this fast-paced landscape, you need to go beyond simply implementing new technologies.
Let’s take a look at three approaches to consider to get the best results out of following the SaaS software trends we’ve discussed.
Bridge the gap between trends and customer needs
While keeping up with the latest trends is important, analyzing how each innovation you implement affects customer experience is equally crucial. You can do it by encouraging users to submit feedback and drawing on their insights to assess how effective your app is.
You can also release a pilot version of your SaaS application before the final launch to test how well the core parts of it work.
Additionally, listening to your customers and reconciling your offering with their needs helps dodge potential disadvantages connected to the new trends. For instance, some customers might be wary of AI. If that’s a tool you’re looking to implement, learning about users’ associated concerns will help you design a proper strategy to navigate the situation.
Be flexible and adaptive
The SaaS industry tends to change at a glance. To stay competitive, you need to be prepared to change with it. Stay open to new trends and technologies and foster the same mindset among your employees.
Also, keep scalability in mind when developing and ensure all your solutions, strategies, and architectures are flexible and can be easily modified when there is a shift in the market.
Prioritize privacy and security
The SaaS sector is marked by operating exorbitant volumes of data. With privacy concerns on the rise, it’s essential to take your clients’ safety seriously and establish a responsible brand image.
When creating a SaaS product, implement sufficient security mechanisms, obtain industry-relevant certifications, and make provisions to stay compliant with all applicable data privacy regulations.
How to get started?
Considering the rate at which software as a service is evolving, simply put, the future of SaaS is now. As we’ve seen from the statistical data so far, it’s often a matter of early and smart adoption of emerging technologies that defines whether a startup will beat the competition and claim the top spot.
This makes creating a SaaS business a puzzle with numerous pieces. While there are certain challenges to face, entering this market prepared elevates your chances to stand out and build a profitable, impactful solution.
We’re here to ensure your development journey is smooth and rewarding. Book a call with our team and discover how we can help you build a successful and future-oriented SaaS company.
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About the author:
Oleg Roberman, Chief of Delivery at Eastern Peak
With strong technical background and outstanding project leadership skills, Oleg helps Eastern Peak customers introduce competitive advantages and instill productive changes in every process by resolving complex business issues and managing multicultural teams through innovation and creative thinking.
