Saas (software as a service) is a booming industry. There is no debate here. And with the rise of Artificial intelligence, SaaS applications are bound to become even more sophisticated and powerful.
As we are rapidly approaching 2024, embracing new technologies and staying up to date with the latest trends and advancements is no longer optional but essential for the growth of your business. The only question that remains is where this ever-changing industry is going.
Since one must first know the destination before planning the route, let’s jump right in and discover:
Brief overview of the SaaS Market
What factors shape SaaS trends?
12 SaaS Industry Trends For 2024
Brief overview of the SaaS Market
The software as a service industry seems to be in a constant transformation and growth process. And there is nothing that can provide relevant insights into the state of this industry better than statistics.
With so much information available about the SaaS market in 2023, we've curated and compiled some extremely relevant and up-to-date numbers to give you a snapshot of the current landscape and help you make data-driven decisions.
SaaS Industry Highlights
The SaaS market is, without a doubt, growing at an explosive rate, going from $237.48 billion in 2022 to $273.55 in 2023 and projected to reach a whopping $908.21 billion by 2030. This means the SaaS industry has an 18.7% CAGR, which is pretty impressive in a post-covid space.
With 71% of companies relying on SaaS model applications, these continue to hold the first position as a real digital transformation driver.
It is estimated that by 2025, almost half of the world’s data will be stored in the cloud.
Two years from now, around 85% of all business products will be SaaS apps.
By 2025, 65.7% of spending on software applications will be directed to cloud services.
What factors shape SaaS trends?
We can all agree that SaaS trends don’t appear out of thin air and are a real and legitimate thing. They are the direct result of factors that transform the way in which individuals and organizations perceive this industry sector.
Customer Preferences
As the software as a service market continues to grow, customer expectations are becoming well-established, and users are putting experience as a first priority.
In today’s landscape, among the preferences SaaS users value, the most popular are:
- Dynamic pricing
- Personalized services
- On-demand solutions
- Ease of use
- Dedicated customer assistance
To fit the bill, emerging SaaS players need to use their knowledge and technology to enhance products. This would require them to first collect customer feedback, and then collaborate with market-recognized partners to benefit from their experience and transform the entire user experience.
| Key Takeaway:
| Understand what value means to your customers and capitalize on it through strong partnerships and constant iteration of new and performing features.
Market Competitiveness
With growth unicorns like Adobe, Salesforce, and Shopify, the total value of the SaaS market is booming. While this is essentially good news, demonstrating that SaaS won’t be obsolete anytime soon, it can also be challenging for new businesses to make an appearance and gain a place at the leader’s table.
However, the growth of the market itself pushes potential SaaS developers to look for emerging industry segments like niche products. The thirst for revenue growth motivates them to roll out better products than what the competition has to offer.
| Key Takeaway:
| Market competitiveness leads to continuous innovation and product improvement.
Technology Advancements
With so much talk about trends like Artificial Intelligence, edge computing, or Vertical SaaS, global customers are more and more eager to put new technologies to the test.
To effectively respond to these expectations and offer customizable options, SaaS businesses need to adapt their product design and development to quickly integrate new technologies.
It is important to realize that the shift towards the DevSecOps practice, has almost 60% of businesses taking this step. This approach offers developers the option to continuously integrate new technologies, swiftly release different SaaS platforms, and maintain a competitive edge.
| Key Takeaway:
| Keeping up with technology advancements has made SaaS developers reconsider their software development, facilitating future integrations.
Ever-changing Regulatory and Economic Conditions
The path that led to the success the SaaS industry is now experiencing is due to nothing other than global trade. However, even though SaaS products can easily reach global customers, they must also endure a large amount of compliance regulations and are subject to real economic turmoil.
Navigating the compliance landscape presents a significant challenge for SaaS providers, especially now with the emergence of AI rules and regulations. Security and data handling audits have become legal requirements for SaaS businesses, complicating the global sale of software-as-a-service products more than ever.
Additionally, the economic environment is both an opportunity and challenge driver for SaaS businesses. Developers must prioritize pricing to stabilize customer acquisition and retention, regardless of economic changes.
| Key Takeaway:
| SaaS providers need to prioritize customer security expectations and spending limits when defining the value of their solution.
12 SaaS Industry Trends For 2024
01. Cybersecurity
SaaS security has always been a serious concern for all those involved in the industry. Significant measures are taken to ensure that cyber threats are lowered in frequency and impact as much as possible. Now, with the emergence of Artificial Intelligence, we’ve noticed a rise in the number of fraud attempts once again.
The irony of this situation is that the use of AI has proven to be instrumental in increasing the level of security within the SaaS market. Leveraging SaaS analytics with AI and ML technologies in complex solutions has shown that users can benefit from increased cybersecurity.
Moreover, a growing number of regulations are being implemented to lower cyber threats. SaaS companies need to abide by these standards, but it can be challenging to keep track of all changes that are now required. Thus, we are witnessing more and more solutions to improve internal operational processing and lower product misconfigurations.
02. PaaS (Platform As A Service)
Estimated to reach over $300 billion in market value by 2030, PaaS is emerging as one of the strongest SaaS trends out there.
It provides enterprises with several noteworthy benefits:
- Reduces costs on hardware maintenance.
- Enhances efficiency and streamlines software development.
- Ensure increased flexibility and mobility.
By choosing PaaS as an alternative, companies are able to focus more on enhancing their core product and avoiding the burden of having to tackle complex system maintenance.
03. Generative AI
When discussing SaaS innovations, generative AI, together with its spin-offs, and the large language models, have been the talk of the town. CHatGPT is still fresh in the minds of users, and its success has opened the door to numerous AI uses.
With an expected CAGR of 35.6% between 2023–2030, generative AI takes the first position among the latest SaaS trends.
This new technology helps SaaS businesses gain new and advanced software capabilities such as:
- Content creation
- Market research
- Personalized support
- Sentiment analysis
Generative AI has completely transformed the SaaS landscape, opening the doors for additional features for greater product enhancement or independent software development.
Whichever route you might be thinking of taking, this is one trend you don’t want to ignore.
04. RevOps
In the midst of the profound transformations in market dynamics, SaaS businesses struggle to grow while maintaining profitability. Unless they strategically manage their sales and marketing operations, the huge upfront investments, competition, and challenging customer retention can take a toll on their success.
RevOps, short for revenue-operations tools, are perceived as the next thing in forecasting and predictive analytics for the sales and marketing sectors. Rolled into one end-to-end SaaS app, RevOps tools offer the bird’s eye view that all business developers seek.
Aligned with machine learning and AI capabilities, these cutting-edge solutions allow users to:
- Focus on operational automation.
- Enjoy complete visibility across the entire sales funnel, including the marketing and customer service phases.
- Gather sufficient insights to enhance conversion rate boosts.
- Move from isolated frameworks to an integrated solution hub.
- Effectively implement a data-driven customer success program to identify additional revenue opportunities.
When it comes to successful RevOps solutions that are greatly popular, we can definitely mention the advanced lead-scoring system, based on customer behavior. Based on ML algorithms, lead-scoring platforms can provide sales experts with a targeted list that is more likely to convert.
This SaaS trend looks at cloud platforms that can streamline and increase team productivity through strong analytics capabilities.
05. Embedded Finance
One of the latest payment trends for 2024 is embedded payments. The integration of embedded payments streamlines the overall payment experience for customers, making transactions more convenient and efficient.
The increasing popularity of digital payments, together with the impressive rise of the gig economy and the increasing demand for alternative payment methods in emerging markets, explain the apparition of this trend.
Through strong partnerships with key players, SaaS companies can offer customers a wider range of payment options without having to build and maintain their own financial infrastructure.
Read on to discover all 12 SaaS Trends for 2024 on PayPro Global’s Blog.
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