Global SaaS is estimated to be worth $130 billion by 2020. Gartner, a leading research and advisory company, recently released its annual report, indicating that SaaS remains the largest segment of the cloud market. So what makes SaaS such a lucrative industry?
With companies like CultureIQ and AppZen following the trail blazed by Salesforce, SaaS businesses are on the rise. Allowing vendors and suppliers to manage their software with no installation, instead, distributing it via the cloud has been revolutionary for the tech industry and consumers alike. But it isn't just efficiency that makes SaaS successful. Cost savings, the implementation of artificial intelligence (AI) and machine learning (ML) have been fundamental to taking the industry to the next level.
One fundamental area of SaaS is how AI facilitates automation. When aggregating large quantities of data, AI is able to filter this into an intuitive process, enabling businesses to not only respond to customer needs efficiently but also freeing up human resources at a company. This includes Chatbots, where frequently asked questions can be answered by an automated bot rather than a person. Used in conjunction with workers, AI can be valuable in creating dynamic businesses.
As customers become accustomed to more personalized services, they increasingly demand this from companies. This is a key area where AI, machine learning and natural language processing is driving SaaS businesses. For example, customizing user interfaces with a customer’s history, including their preferences on a platform will not only be more efficient for the customer but increase the likelihood of them returning to the business. If a company doesn’t utilize personalized services, it risks losing out to competitors who are.
SaaS has also brought sharper insights into big data, data usage, and analytics. Today, with the evolution of SaaS, companies are able to leverage an understanding of how customers are using their software, from the features being used, those that are redundant to significant usage patterns.
The key to SaaS is flexibility. As the development of AI, ML, and blockchain presents businesses with new, lucrative opportunities, SaaS is set to evolve rapidly before our eyes. With a market value of $116 billion across the globe, the industry is going from strength to strength. Customized solutions for existing customers’ improves retention and ML models can also help a business draw new customers. By adjusting to the changing landscape, SaaS businesses are well-placed to enjoy long-term, sustainable growth.