As cloud computing turns the traditional tech industry on its head, a growing number of businesses are adopting SaaS models. A recent IDC forecast estimates cloud spending to boom almost 25% in 2017 to over $122 billion, seven times faster than the rest of the IT space. SaaS delivery is set to grow five times faster than traditional software product delivery, as firms remain satisfied with their SaaS deployments and a lower cost of entry for cloud services brings on waves of new customers. Yet as the cloud supports the simultaneous boom in SaaS providers, the fundamentals of the industry are changing just as quickly, with software businesses offering more tailored, efficient and mobile-friendly solutions to their enterprise customers.
While initially, SaaS was designed to fit broad needs for customers in business functions such as sales, marketing and HR, new SaaS providers are seeking to offer vertical-specific SaaS applications, known as the industry cloud.
AI, Machine Learning and Automation
The number of intelligent apps and devices will continue to boom in 2017, as vendors are expected to integrate AI into their software. As SaaS solutions aim to get work done as efficiently as possible and with less human error, automation in software will provide more value to customers while also posing as a threat to replace entire sales teams.
Emergence of IaaS/PaaS
While SaaS is expected to account for 60% of cloud spending in 2020 through applications and infrastructure, the IDC notes that spending on infrastructure as a services (IaaS) and platform as a service (PaaS) should grow even faster than SaaS in the upcoming period. IaaS is projected to mushroom 30.1% annually from 2015 to 2020, with spending on IaaS increasing 32.2% over the same period. The PaaS market is projected to reach $7.5 billion by 2020.
As cloud applications are expected to account for 90% of all mobile traffic in 2019, new SaaS players have positioned themselves against traditional providers with mobile friendly-applications. The popularity of remote work has lifted employee mobility and improved customer response time, driving 35% of businesses to up spending on mobile systems this year, according to the Computer World’s Forecast 2017 survey.