While “software as a service” (SaaS) has been around since the 1990s, it’s been having its heyday since the earliest days of the pandemic. With the rise of remote and hybrid workplaces following the first lockdowns of 2020, more and more companies are moving key business functions into the cloud. One of the biggest SaaS trends since then has been the industry’s response to this demand by creating solutions that cover virtually every department and business function.
By some estimates, 70% of the business apps used today are SaaS-based, and that number is expected to increase to 85% by 2025. SaaS is here to stay and this article will explore five SaaS trends that are expected to shape the future of SaaS in the coming year.
Why has SaaS become so popular?
SaaS trends aside, the SaaS distribution model generally provides good value for money, which is important in today’s economy as companies look to streamline operations and reduce costs.
Spurred by the pandemic, companies of all sizes are using SaaS products to improve efficiency and collaboration across locations. This increased demand has accelerated the development of new SaaS products. These new user-centric solutions have broad connectivity and are hosted, accessed, and used online. In line with current SaaS industry trends, they’re easy to understand, subscribe to and implement, which makes them incredibly accessible to people outside of company IT departments. Since this type of software is hosted and maintained by the solution provider, state-of-the-art security features, such as firewalls, data encryption, and regular security updates have become industry standard, making SaaS solutions very attractive to companies looking to avoid becoming the next victims of a data breach.
5 Trends Shaping the Future of SaaS in 2024
1. Mobile-First Development
The demand for SaaS products took off like a rocket, and many SaaS providers have been playing catch-up as they optimize their existing products to provide an up-to-date mobile experience. One of the biggest future trends in SaaS will be mobile-first development in which new products are developed first for smartphone accessibility and then adapted for PC – the opposite of how it’s mostly been done up until now. This approach is crucial for companies wanting to stay in business over the long haul – especially since nearly three-quarters of internet users (3.7 billion people) are expected to access the web solely via their smartphones by 2025, with PC-only access trailing very far behind (69 million people).
2. Emergence of Micro-Niches
The past two years have been a huge revenue opportunity for SaaS companies as businesses have had to pivot from mostly on-site teams to people working from home across many locations. Cloud-based tools were the logical answer – and many companies have profited big time. But as more solutions come to market, it becomes more difficult to get a piece of the pie.
In the future, one-size-fits-all software solutions will mostly belong to the industry’s biggest players. The lucrative future of SaaS for everyone else lies in creating highly specialized software designed to address very specific needs. In order to compete in what is becoming an increasingly over-saturated market, we’ll see SaaS trends in which savvy developers will cater to micro-niches. As a result, we’ll see more micro-apps aimed at meeting the precise requirements of narrow subsets of users in specific industries.
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3. More Content Marketing
In the over-saturated SaaS marketplace, visibility is the key to future profitability. While SaaS is a crowded market, this presents outstanding marketing opportunities for companies developing micro-niche products, which will have lower competition for important and highly relevant keyword rankings.
Savvy companies wanting to cement their position as players in the future of SaaS will invest in content marketing. Compared to cost-per-click (CPC) advertising, content marketing can deliver outstanding ROI for small niche SaaS companies while helping to build their credibility as providers of highly specialized software solutions that understand their users’ needs. Investing in evergreen content will drive organic traffic month after month – without the recurring expense of CPC campaigns.
Need more convincing? Currently, only 11% of SaaS companies are using content marketing. This is an excellent opportunity for astute companies – even those in highly competitive areas of the industry – to become first movers and jump onto one of the most profitable trends in SaaS since the early days of the 2020 remote-work boom. That’s why content marketing will be one of the most important SaaS industry trends of 2024.
4. Usage- and Value-Based Pricing
Recent SaaS trends relating to successful business models have moved toward higher-volume, lower-priced solutions than in years past. Many of today’s SaaS products are based on a self-service business model in which potential buyers purchase online without having any personal contact with the company itself. While this is an extremely cost-efficient way of selling subscriptions, it also reduces SaaS products to a commodity, which erodes brand loyalty and increases the likelihood that customers will jump ship for a cheaper option.
Smart SaaS companies understand that these days their buyers hold most of the power. With inflation at record highs and an uncertain economy, one of the most important 2024 SaaS trends will see a shift toward usage- and value-based pricing models. With shrinking profits, SaaS buyers are hesitant to lock themselves into a contract for a product that they may or may not use – and which may or may not deliver the expected ROI. In response, the financial future of SaaS lies in pricing models in which users pay an amount in proportion to the value they’ve derived from the software. Customers are less likely to churn if they’re getting what they perceive to be a good value for money with little risk.
5. More artificial intelligence (AI) in customer relationship management (CRM)
With the more widespread use of SaaS products come larger datasets that can be used to improve algorithms and improve the accuracy of AI. The pandemic caused major disruptions to the customer service status quo. Companies have had to adapt to these new customer demands in order to stay competitive and maintain their market shares. As companies strive to provide best-in-class service, there’s a huge opportunity to use predictive behavior analysis to automate CRM, improve personalization, sharpen customer segmentation, and better identify customers who are ready to churn. Better AI capabilities will enable companies to automate redundant tasks, improve response times, provide better self-service support tools, reduce customer support costs – and provide better service. That’s why we’ve chosen it as the fifth of our SaaS industry trends for 2024.
See how Covid-19 changed customer service forever. Read this article about the 5 trends shaping B2B customer service in 2024.
Improve Operational Efficiency with Dashboards
If you’re like most SaaS companies, you’re probably using multiple software systems to help you stay on the cutting edge of SaaS trends. Plecto’s real-time dashboards can improve your operational efficiency by compiling all of your data in one place. Integrate your telephony, CRM, support, and campaign data to synchronize operations across all departments. Centralize and cross-combine different systems to ensure that everyone is on the same page with the most up-to-date data.
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