SaaS (Software-as-a-Service) is something people are now used to hearing about. SaaS services are now a common part of our daily professional and personal lives.
Simply put, SaaS is a business model in which customers pay to use software hosted by a company on a remote server. Instead of installing and maintaining software, users simply access it via the internet, without the need for complex software and hardware management. SaaS allow anyone to access online softwares the same way Netflix gives easy online access to movies and series.
SaaS is taking over the software market. Predictions say that the service-based cloud application industry will be worth $143.7 billion by 2022 — a level of growth that will shape SaaS trends in 2021.
According to Bloomberg, public cloud platforms, business services, and applications (SaaS) will all grow at a 9% CAGR (Compound Annual Growth Rate) between 2020 and 2023, and be worth $60.36 billion. A Betterbuys report reveals that the specific expenditure in the U.S. SaaS Industry is forecast to reach $55 billion by 2026. And according to Gartner, the global public cloud service market is projected to grow significantly in 2021 and beyond.
The M&A landscape for Micro-SaaS is also booming and is highly reflective of the attractiveness of the market as as whole, with more and more players trying to get a slice of the cake.
In short, the figures have been showing SaaS as the future for the next years and beyond.
According to softwaresuggest.com, in March 2021, here are a few SaaS companies that have raised a significant amount of money or had huge IPOs.
| . No. | Name | Category | Funding Type | Funding | Lead Investor | Total Funding |
| 1 | Calendly | Scheduling Software | Series B | $350M | ICONIQ Capital | $350.6M |
| 2 | Airtable | CRM Software | Series E | $270M | CRV and WndrCo | $617.6M |
| 3 | Ironclad | Contract Management Software | Venture – Series | $100M | Salesforce Ventures | $184M |
| 4 | Service Titan | Field Force Automation Software | Series F | $500M | H.I.G. Growth Partners | $899.9M |
| 5 | Stripe | Payment Processing Software | Series H | $600M | Baillie Gifford | $2.2B |
| 6 | 3CLogic | Predictive Dialer Software | Debt Financing | $9M | Recurring Capital Partners | $21.1M |
| 7 | HighRadius | Cash Collection Software | Series C | $300M | Frank Slootman | $475M |
In the following section, we have listed hot SaaS trends, verticals and positioning, their peculiarities and examples of companies which are showing signs of standing out as the most relevant in 2021.
1. Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) optimizes business processes, increasing productivity and efficiency while automating repetitive tasks, and supporting human capabilities.
Within business scenarios, artificial intelligence (as well as machine learning, in many cases) provides an advanced degree of responsiveness and interaction between businesses, customers, and technology.
Al and machine learning hope to have a tremendous impact in fields like:
- Security – the usage of drones will become immediate: A delivery package, emergency responses or even urgent delivery of medical items.
- New Services – through AI, individuals will improve their ability to solve problems and generate new ideas. Robots and Al will be fully integrated into the business operations and will impact organizations tremendously.
- Empower Businesses – Al technologies will bring a huge change in companies and the development of consumer-based applications, by giving analysts, developers, marketers and many more professionals the chance to interact and understand users much better.
- Healthcare Improvement – Intelligent machines will be very useful in this field by having faster and immediate access to a larger set of clinical data. The doctors, by delegating that part of work, will have more time to interact with their patients and improve outcomes.
- Facilitate Sustainability – Al will be used for higher and more significant purposes, not only to increase business development. There are many areas in which machines could help a lot and create improvements, especially if we talk about the great challenges of our century like urbanization, population increases and energy.
- Make Humans Smarter – Computing power will increase progressively, by giving us more power in training our AI models. The amount of data analyzed will grow exponentially and that allows us to monitor more elements in our platforms and the world in general. Combining that with AI, we will have the ability to make more intelligent predictions about future behaviors and events and train smarter knowledge systems and models.
In addition, we can see Al by receiving personalized experience, on chatbots helping to boost customer interaction, in High-end security, overcoming business challenges, improvement in the sales process, among others.
Examples of AI companies to watch for:
Machine Learning companies to watch :
2. Centralized Analytics
Centralized Analytics will enable users to look into their data from a single point of truth, discovering hidden insights by utilizing modern solutions such as performance dashboards, where every member of the team has access to the most vital business information. The centralized nature of SaaS models will enable users to access data from any device, at any time. Modern online business intelligence makes this happen with the help of advanced software capabilities and the online environment where each member of the team has access to their analytics.
Industry experts believe that investment and value in analytics-centric SaaS models will rise in 2021 and beyond and analytics will become a central component of many service-based software platforms, making business intelligence and data-driven decision all the more powerful for anyone looking to get ahead of the competition.
Great examples of Centralized Analytics companies to watch for
3. Vertical SaaS & White label SaaS
The vertical SaaS model does not cover a broad product category. It does not target to be all things to all people. It is completely customizable, targeting clients within specific industries, supply chains and industry verticals.
Healthcare analytics software, retail analytics, or modern logistics analytics are some examples. Companies who are looking to benefit from specialization are finding Vertical SaaS to be a cost-effective, industry-specific option that allows them to refine the customization of certain features.
White label is the process of buying a re-brandable product/service, and then re-selling it under your brand name to the end customer. It’s a great way to offer more services to clients without adding additional work for your team.
By using white label solutions, clients have more time to devote to business development. As an example, LevelUp white-label their mobile payment and loyalty program for restaurants.
Examples of Vertical SaaS and White Label players:
4. API Connections
The next top SaaS trend on our list is API’s (in full Application Programming Interface), a software intermediary that allows two applications to talk to each other, ensuring that a system makes information available to other systems. This allows data to be easily and safely exchanged with each other.
We commonly use API in our daily lives by using Weather Snippets, paying with PayPal, travel booking and others.
API connections companies shaping the future of the market:
5. Migration to PaaS
PaaS (Platform as a Service) Migration is the process of moving from the use of one software operating and deployment environment to another environment, for instance, from an on-premise solution to the cloud.
In a simple way, PaaS players offer a set of global cloud-based products like storage, databases, analytics, compute, management tools, helping organizations move faster, with lower IT costs and scalable.
Some of the most prominent players on this market :
6. Micro-SaaS
In a market inflated by a large number of players intensifying the competition, SaaS companies will have to find new ways to offer value, innovate and connect with new prospects.
Due to this new and cutthroat climate, it is expected to see more micro-SaaS innovations emerge this year. Normally run by a small team, in a more niche business, SaaS offerings could prove increasingly valuable to businesses across industries in 2021, which means we can all expect a host of fresh micro-SaaS innovations over the next months.
A few players arising in the Micro-SaaS space :
7. Low-Code Capabilities
Low-code development solutions provide building blocks that IT users can assemble into workflows and applications. These building blocks abstract away the code behind actions and commands, making it possible for IT to assemble workflows and business apps without the need for hand-coding.
A few good references in the low-code market :
8. Mobile Optimization
Mobile optimization is the process of adjusting website content to ensure that visitors that access the site from mobile devices have an experience customized to their device.
In 2021, enhanced mobile optimization will become a top priority for almost every software-as-a-service startup or provider.
Some leading mobile optimization companies to watch for :
What SaaS Trends Show For The Coming Years
Bringing additional figures to this article, according to Forbes in 2019 SaaS revenue was projected to be $171 billion. By 2020, that number was expected to climb to about $200 billion and, by 2022, it should be at $233 billion. According to current projections, based on the below SaaS trend, going forward this market should generate revenue of $369.4 billion in 2024.
Cloud service and SaaS revenue forecast
Source : SoftwareAdvice
