Gone are those days where one needed manual effort for almost every routine work. We are operating in an era of technology boom. No need to hunt for taxiwalas anymore, we have ola / uber who refers taxis to our doorstep. Likewise, there is no need to wait in queue for food parcel anymore. We have swiggy who could deliver the food parcel at our doorstep. Thanks to SAAS & its offshoots. These are the examples of how Saas is implemented through mobile applications in our day to day life for public utility. The utilization of Saas is much more at enterprise level since businesses has got to understand the power of Saas and are ready to invest more towards it.
Gartner defines software as a service (SaaS) as software that is owned, delivered and managed remotely by one or more providers. The provider delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time on a pay-for-use basis or as a subscription based on use metrics.
According to Forbes, “by 2018, 59% of all cloud workloads will be SaaS based, up from 41% in 2013″. This is compared to 28% of cloud workloads being SaaS and 13% being SaaS in 2018.
A research by Intuit study says that 85% of SMB executives are willing to invest more in small business software solutions over the next 5 years & nearly 43% of the SMB owners use a Smartphone as the primary device to run their operations.
The following are the emerging trends in the Saas market:
More focused approach by the Saas Providers: The entire Saas provider market could be cut into 2 as Horizontal Saas providers & Vertical Saas providers. Horizontal Saas is more focused towards a department within the organization (like HR, admin, payroll etc.) and spread across industries, Vertical Saas focus is on a particular industry rather than the individual departments within the organizations. The maturity of the product depends on the industry & department in which they operate.
Need for Saas discovery tools: According to a poll conducted by CISCO, 75% of enterprises didn’t have a full organization cohesive cloud strategy in place. This demands the need for discovery apps through which companies will be able to cut down on cost and operational gaps, at the same time increase the level of internal and external data security.
More Saas providers continue to emerge:Saas market has seen a phenomenal growth over the past decade. According to TechCrunch, the companies will trade at 5 times of the revenue while growing 30% YoY. This would lead to more market opportunities through venture capital investments, leading to new ideas to generate leading to upsurge of Saas industry.
Even though many creative start-ups have ventured with new ideas, they are yet to taste the complete success due to the fact that the enterprise model of deployment may not work the same way as the way it worked for consumers. The following could be the potential reasons:
- Even though there are lots of Saas products available in the market, corporate tend to be more inclined towards the product that are sold through appropriate sales force or partner network, the reason being the investors believe more on the channel through which they got introduced to the product. This makes it mandatory for the Saas providers to establish themselves in the market. But, it requires huge investments until the product gets the recognition it deserves. Many providers fail in this arena due to lack of investments until the break-even.
- With trends like BYOD likely to hit the market by 2017, Information security & confidentiality will be a priority to the corporate. When the product hosted by Saas provider stores the corporate information, it becomes mandatory requirement for the SaaS provider to adhere to the regulatory requirements. In order to address this, there is a general trend among the investors to invest on cloud based security in order to meet the compliance expectations.
- Corporates look in to the roadmap of the company & product before investing on the product as it might be necessary for their training requirements. Not only from the training standpoint, but also from the transparency standpoint, corporates wanted to have an idea on the product they invest into.
This makes Saas providers to rebuild their priorities & revisit them at regular frequencies in order to stay in the market. The providers have to redefine themselves in order to meet the ever changing customer requirements.
Prasanna is a former Happiest Mind and this content was created and published during his tenure.
