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Home / Insights / Blog / SaaS Industry Trends: Why Software Products Are Becoming SaaS-Based
January 21, 2023 - by Synoptek
With the success of the cloud, Software-as-a-Service (SaaS) is becoming one of the fastest-growing business models globally. Allowing applications to run on servers as well as server less or PaaS-based architectures dramatically reduces dependency on different platform configurations – thus helping organizations streamline their operations and improve customer experience. Given these benefits, software products are increasingly being developed using the SaaS model, making it easier for organizations to bring innovative and scalable products into the market while ensuring their maintenance and updates are easier and faster.
Companies today are increasingly looking for custom software development solutions that focus on product goals and needs and work around these needs to cater to market demands. Custom software development not only enables organizations to meet tailored business needs but it also allows them to have ownership of the software: right from branding to the way the software is developed, how it looks and feels, and meets the needs of unique users. Moreover, no maintenance fees has to be paid since the product is completely owned and controlled by the organization, and edits and modifications can easily be made – as and when needed.
Although there are different ways in which custom software can be developed, one of the best ways to develop them is by opting for the SaaS model. Let’s look at 10 of the top benefits of SaaS-based product development:
Given the rate at which organizations experience spikes in growth, software applications today need to be able to cater to this growth. Thankfully, SaaS-based software makes it easy for organizations to scale their products up or down without compromising on cost or quality. Since additional computing resources can easily be provisioned, organizations can quickly ramp up their products and drive the accelerated growth of their business.
SaaS products help amplify security and keep up with evolving security and compliance requirements. Via full control over quality and compliance, the model aids in achieving high levels of security while ensuring faster releases as well as secure, anytime, anywhere access. Through deep integration with the CI/CD pipeline, the SaaS model allows organizations to integrate code with DevOps processes, speed up the development of new and improved security features, and deploy it to different users simultaneously.
SaaS models also make it easy for organizations to shorten their release cycles. Any new feature or change can be developed and deployed quickly, enabling organizations to bring new capabilities to their users – as they get developed – without making them wait to go through a long release process to get access to these new features.
Developing software products the SaaS way provides organizations the freedom to include features they want, when they want it. Via modern tools, cloud-enablement, and advancements in DevOps, they can also improve the build as often as they want, as well as enable integration with a highly customized ecosystem. Such development will put organizations in a position to control the overall quality and user experience of the products they build, their deployment, as well as their scalability – making releases faster and far more reliable.
Another crucial advantage of developing software products the SaaS way is the ability to integrate data management and reporting capabilities – right into the DNA of these applications. By setting up a cloud data warehouse and embedding it within the product, organizations can make the most of valuable KPIs for users – via one unified, integrated system – instead of having multiple applications and UIs for users to log in to retrieve or access information.
As the pandemic unfolded, the concept and perspective of work underwent a significant transformation. Employees’ expectations shifted permanently, leading some to resign for improved work-life balance or increased flexibility in their work arrangements. Between 2019 and 2021, people working from home tripled to 17.9% (U.S. Census Bureau, 2022), and in its continuation, employers adapted their workplaces to embrace remote work and hybrid models.
Artificial intelligence has become a common feature in the SaaS industry. Companies in various sectors can now utilize autonomous innovations to enhance product, service, and content customization while gaining insights into their target audience’s needs through data-driven analysis. This combination of increased ROI and reduced input enables businesses to improve efficiency and intelligence while minimizing costs through AI integration.
Similar to AI, machine learning (ML) is experiencing remarkable growth, particularly in the SaaS sector. Through self-improvement capabilities, machine learning empowers SaaS solutions to enhance operational efficiency and intelligence. As machine learning becomes integral to AI-driven SaaS, companies will demand better control over software training. With that being said, developers now offer Machine-Learning-as-a-Service (MLaaS), which provides features like data pre-processing, facial recognition, data visualization, natural language processing (NLP), predictive and preventive analytics, and deep learning.
A prominent trend in the SaaS industry is the rapid rise of vertical SaaS. Unlike horizontal SaaS platforms that serve a broad audience with general business needs, vertical SaaS solutions focus on industry-specific needs. These tools are developed by experts with deep knowledge of the targeted industry, offering tailored features that address unique processes within those sectors.
As a SaaS manager, your commitment lies in efficiently operating and expanding your business. To achieve this, meeting customer needs and minimizing churn is paramount. With customer acquisition costs significantly higher than retention expenses, reducing churn becomes a top priority for SaaS managers aiming to cultivate a loyal brand following. While churn is inevitable in the SaaS journey, implementing best practices can effectively manage it. Beyond product improvement, reducing churn entails adding value to customers’ lives. By making a meaningful impact and addressing their needs, churn rates stabilize, allowing you to focus on your core strengths.
With the global SaaS market expected to grow by $99.99 billion between 2021-2025, there is immense traction to build products that are SaaS products. SaaS-based software development models provide a great platform to improve scalability, amplify security, shorten release cycles, drive flexibility, and enable embedded data management – helping organizations accelerate time-to-delivery, empower teams, and help the business scale.
If you want to develop SaaS-based applications effectively, you need to make sure to leverage all available cloud services while keeping a constant focus on the functionality, security, maintainability, and scalability of the applications being built. At the same time, you need to ensure to pick up the best technologies – keeping a 5-10 horizon in mind – to ensure the SaaS applications you build can continue to meet the needs of your business and your customers on a long-term basis. Leveraging cloud-native capabilities, architecting applications for multi-tenant architectures, and integrating advanced self-service options can also go a long way in building a functional and feature-rich SaaS product.
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