Welcome to read the statistics we’ve presented highlight the most significant SaaS trends of 2023.
SaaS Full Form: Software as a Service - javaTpoint
1. Artificial intelligence for business needs
Artificial intelligence is an alternative to human intelligence: it allows programs to make decisions based on analysis of information just as a human would. An intelligent software program is also able to learn over time, so any business-related data it has to work with contributes to better decision-making in the future.
There are a lot of ways that SaaS products can use AI. Let’s take a look at some of them:
Personalization
One of the reasons why AI became one of the growing SaaS trends is because users expect a more personalized experience in every app they use. AI helps programs to better understand what users want and automatically adapt the product to their needs. For example, when incorporated in business software, AI may analyze workers’ app usage patterns and adjust the home or menu screens to bring the most used features to the top.
Automation
SaaS companies use AI to reduce the risk of human error and automate manual operations and time-consuming processes. In this way, they save money and other resources. AI automation can be used for intelligent data capture, intelligent and robotic process automation, and customer communication management.
Services like Amazon Textract significantly reduce the time required to complete paperwork by automatically extracting printed and handwritten text from any document using AI.
Predictive analytics
Predictive analytics uses complex algorithms to analyze enormous amounts of data to forecast outcomes, trends, users’ behavior, etc. Basically, predictive analytics as a part of SaaS platforms can give you insights you can use for the benefit of your business. Such an AI system works in the following way:
AI analyzes historical data and creates summary statistics.
AI identifies why certain events occured and builds a pattern accordingly.
The results of this analysis are used to forecast future events.
With the help of predictive analytics, companies can better plan their budgets, foresee and mitigate risks, etc.
Security
Data stored in the cloud is vulnerable and requires unprecedented security measures. AI allows you to use intelligent algorithms for security purposes. AI-based security systems can automatically learn about and prevent new threats. Plus, such systems can work without user intervention and don’t require skilled cybersecurity specialists.
Some industry leaders have already illustrated the perks of applying AI.
Seedata.io innovation
Seedata.io, one of the fastest-growing startups in 2022, uses AI for security purposes. This SaaS-based cybersecurity platform is designed to mitigate data leaks. AI is employed to identify incidents before they pose a threat to vulnerable data. Seedata.io generates fake data that imitates a user’s real data and traps cybercriminals into thinking that they’re interacting with the real data. Then, the AI-based system analyzes interactions with the fake data and informs the user that someone is trying to break into their database.
Grammarly
Grammarly is an AI-powered text editor that uses natural language processing techniques to give users language and grammar suggestions in real time (to correct mistakes, reduce repetitive language, replace complicated sentences with simpler ones, etc.). It helps users strengthen their writing and is an effective tool for both native and non-native speakers, helping them to easily and quickly enhance their communication.
2. Blockchain and SaaS
Built on the principles of cryptography and decentralization, the blockchain ensures the security of transactions. SaaS products take responsibility for users’ sensitive data, and blockchain solutions can be valuable for securing transactions within SaaS software.
The blockchain helps SaaS businesses create reliable systems and avoid security-related problems that are hard to overcome with traditional databases. This technology allows for securing such processes as smart contracts, online payments, auditing, and tax collection. As a result, it leads to enhanced customer loyalty.
It’s hard to imagine SaaS startup owners that don’t want to build trusting relationships with their customers. That’s why the blockchain has become one of the fastest-growing SaaS trends.
Let’s take a look at some growing SaaS-based blockchain startups.
OriginStamp
OriginStamp is a blockchain timestamping service that allows users to upload unique files to a public blockchain ledger to timestamp them and obtain proof of ownership. OriginStamp can be integrated with more than 1500 apps, so users are free to import files from Google Drive, One Drive, and many other services.
MythX
MythX detects vulnerabilities in Ethereum smart contracts. The service is mainly designed for developers and allows them to run a security scan to identify and prevent security breaches. It works by carrying out a full-scale code analysis. MythX also encourages the use of cryptocurrencies by permitting users to pay for subscriptions using stablecoins (Tether, USD Coin, Dai, Binance USD, etc.).
3. Vertical SaaS
As competition between horizontal and vertical SaaS products reaches a fever pitch, we can assume that vertical SaaS will continue to trend in 2023.
Unlike the horizontal approach, which attempts to cover as many fields as possible with a single SaaS product, the vertical SaaS strategy focuses on satisfying specific needs within an industry and allows a SaaS provider to get closer to the potential client. Let’s explain this difference with some examples.
Veeva, a company that provides software solutions for the pharmaceutical industry, belongs to the vertical SaaS category. It provides cloud-based software to help pharmaceutical companies manage their sales and operations. Thanks to Veeva, companies of all sizes can release products to market faster and more efficiently.
Slack, in turn, is a horizontal type of SaaS product, as it isn’t centered around a particular industry: it’s a universal platform for online communication, and any company can integrate it into their workflow regardless of the industry.
We’ve identified three main reasons why vertical SaaS has become such a trend.
Successful marketing
By specializing in a particular niche with a precisely defined target audience, vertical SaaS providers can launch more successful marketing campaigns. Targeting a narrow group of customers, you can find out what they like or dislike, what social media channels they prefer, and what marketing tricks are most effective for this specific group of users. Vertical SaaS products also afford more opportunities for cross-selling and upselling. As a business owner, you can know what products to bundle and how to win customers’ hearts with special offers.
More opportunities for business growth
The majority of solutions try to cover a wide range of needs and be one-size-fits-all, which means they develop horizontally.
Vertical products are built on a completely different foundation. By catering to more specific requirements, you can deliver greater business value. The number of solutions tailored to distinct market needs is smaller, and so is the competition.
Consider the aforementioned Veeva, a vertical SaaS company from the life sciences industry. It’s now one of the leading global providers of cloud-based software that has won global recognition:
Veeva was included in Inc.’s Best-Led Companies of 2021, obtaining 10th place among 250 companies in the rating.
Fortune ranked Veeva Systems one of the Fastest-Growing Companies in 2021 — for the fifth year in a row.
In May 2022, Forbes presented its Global 2000 rating, where companies are ranked based on their sales, profits, assets, and market value. With $1.85 billion in sales, $427.4 million in profits, $3.82 million in assets, and $28.4 billion in market value, Veeva Systems achieved 1,857th place.
Veeva has achieved that much success because it studied the specifics of its target industry, delivering high-demand solutions that horizontal services could not offer.
Less competitive market
Vertical SaaS businesses have a narrow audience with distinct needs and, therefore, face lower competition than horizontal SaaS businesses. For example, if you create a SaaS app to manage a lawn care services workflow, you will likely have no strong competitors; if you choose to build a project management SaaS platform, you will have to outperform dozens of well-established players.
Vertical SaaS became one of the notable SaaS trends since it gives founders more chances to establish a leading position in a specific industry or, at the very least, successfully enter the market by choosing a certain niche.
4. Open API
An application programming interface, or API, is code that connects two software products. In other words, it allows your SaaS product to be integrated with other software.
But what is the value of an API for users? First of all, APIs allow users to integrate your product with their existing system. Secondly, users can sync their databases without needing to transfer all data manually. In addition, APIs allow users to have all the tools they use in a single program so they don’t have to open multiple tabs.
For example, you can use the $HubSpot(HUBS)$ API to integrate the HubSpot CRM into your enterprise resource planning system instead of using HubSpot in a separate browser tab. Following the example of HubSpot, you can let your users expand the functionality of their software instead of adding another web app to the list of programs they use in their work.
By creating APIs, you make the life of your target users much easier and can get a significant advantage over SaaS developers that don’t release APIs.
Conclusion
As you can see, the SaaS model is becoming ubiquitous. You can consider the SaaS trends and statistics we’ve described to make a final decision in favor of SaaS and start building a product today while your competitors are still hesitating.
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