With a projected global market size of over $435 billion by 2025, the SaaS landscape is rapidly evolving to meet the diverse and growing demands of its clients.
As we venture into a new era of digital transformation, how will SaaS platforms spearhead the frontier of innovation is a core question I am discussing and exploring everyday.
Much like how the industrial revolution propelled society into a new era of production, the SaaS evolution is driving businesses into a new era of digital progression.
I often reflect on the wise words of Marc Benioff, the co founder of SalesForce:
“I discovered that in order to succeed with a product you must truly get to know your customers and build something for them”
In this article I will give my take on the future of Software as a Service (SaaS) platforms and how they can evolve in the coming years to build products that serve their customers.
To summarise briefly, I would expect it to be along the lines of these points:
While it's challenging for me to predict with certainty what will unfold.
Several of the following themes are likely to influence the evolution of SaaS products in the coming years and I will discuss a few more in detail within this post:
Software platforms are increasingly catering to more specialized and niched, vertical markets. This is due to a saturation of general purpose and average SaaS tooling.
These focused SaaS solutions target very specific niche segments of industries like healthcare, finance or agriculture. They assert their dominance by offering niched features, application of machine learning and tailored settings for compliance automation to name a few.
These niched built products are focusing on the staples of strong product market fit which is remaining user centric and solution space specific. In short they help a very specific customer achieve an important objective with as much efficiency as technologically possible.
This SaaS niching, is creating dominant micro platforms which are heavily specified to the task at hand and are optimized beyond normal expectations which ultimately delivers incredible ROI on the monthly licensing fee.
There is large scope for growth with this type of model in the coming years.
As noted above, Artificial Intelligence (AI) and Machine Learning (ML) are becoming integral parts of many SaaS platforms.
The functionalities are being rapidly adopted by the leading companies and enabling more intelligent data analysis, automated decision-making, and enhanced user experiences.
This is for sure a macro trend of product development in 2023. (thanks chat-gpt-3)
I would Expect SaaS platforms to become increasingly 'smart' in the coming years due to the untapped potential in applying big data models to new problem domains. Combined with the ease of innovation explanation and realization understood by non technical senior management.
This discussion has really opened up in 2023 due to the relatableness and utility of Chat GPT 3 by the non technical workforce. This trend and similar trends will only expedite technology innovation and adoption of specialized SaaS platforms in the short term future.
This is a bit of a contentious issue but I am a strong believer in the future of serverless applications.
SaaS products will continue to evolve their back-end architectures and the trend of making use of serverless computing over provisioned architectures will most likely continue and gain popularity in the coming years.
We have already seen large and public declarations of the costs incurred by many organizations by migrating on-prem provisioned architectures into the cloud.
The questions around provisioned cloud architectures will intensify in the current liquidity crisis and the trend will continue as the cost efficiency benefits of serverless architectures will only continue.
The ability to scale up and down rapidly whilst moving to an on demand infrastructure as a service model is no doubt the most attractive and idealistic cloud application model.
The reality is that fractional usage and shared cost of ownership models are tried and battle tested winning business models in services which become commoditized.
Compute in the cloud is certainly at the commoditized inflection point in 2023.
As competition and specificity of user centric products increases, UX will become a critical differentiator.
Combining the application of statistics, machine learning and big data sample sets on user activity will only intensify the escalation of benchmarking UX suitability.
Expect more intuitive interfaces, customizable dashboards, and responsive designs that work seamlessly across devices and platforms.
Whilst also being tailored to users and conversion models.
As SaaS platforms aim for global reach, multi-tenancy and the ability to scale quickly will become crucial.
This allows SaaS vendors to serve many customers efficiently, even if those customers have different requirements of the same application logic.
With the rising number of cyber threats and stringent regulations like GDPR, SOC2 and ISO27001.
SaaS platforms will have to invest more into security features, isolation and disaster recovery to maintain compliance certifications.
The desire for common compliance standards is due to the nature that SaaS platforms do not exist in isolation; instead, they will be part of larger ecosystems, often through API integrations with other SaaS products and legacy systems.
Some of these will be highly regulated and will unfortunately be bound by the old adage.
“You are only as strong as the weakest link”
Pre pandemic there was a huge global focus on sustainability and the environment. Although in 2023 the narrative appears to have lost some relevance in the chaos of rising interest rates, there is and will continue to be a trend to further increase transparency and democratization of supply chains and critical systems.
Although buying decisions and consumer understanding of supply chain ingredients are still at low levels it would be foolish to think that the availability and accessibility of technology will not further increase the transparency of information and data flow to the consumer over time.
Decentralized open ledger systems are clearly one step in this direction which have gained irrefutable notoriety in the past 5 years.
I am basing this statement of the fact that the number of people aware of Ethereum post pandemic is massively higher than in 2018.
There are plenty of people with an idealistic desire to move to a decentralized critical systems. Although I am unsure if this is a good or viable idea in the long term there is more than enough people questioning the governing society we have around us.
All of the points in this article are random musings of potential areas of development and innovation which would likely unfold in the near term technology trends observed by consumers.
The landscape is evolving quickly and as business functions start to adopt further and more optimized automation options the progress will likely expedite and create differentiation between the forward leaning organizations and the ludites who will be left in the dust if not embracing a significant shift in product development mindsets.
Adapt or be left behind with limited possibilities to catch up is the situation in 2023
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