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Stepping into a new decade: What’s evolving from 2010 to 2020 in SaaS

Shihab Muhammed

21 April 2020

6 min read

2020 has settled in and with the New Year has come a whole new decade! Now, looking back, SaaS companies have had quite a ride in the decade that passed by. The graph’s been rising up and as per studies conducted, by 2018, around 89% of the world’s business enterprises were already using SaaS solutions.

The flexibility, accessibility, cost-effectiveness and the wide range of features offered by cloud-based SaaS enterprises are luring more and more organizations as each year passes by.

According to Gartner, SaaS revenue is expected to hit a whopping 151 billion dollars by 2022, and if that’s the case the new decade is going to be a spectacular one for SaaS enterprises. Yes, of course, it’s also time to leverage the possibility that 2020 has brought in.

SaaS Revenue Forecast

Top 5 Saas Industry Trends of 2020

We have done our bit of research and predicted the top 5 SaaS trends that are expected to dominate the 2020s and if you are looking forward to making the 2020s the best decade for your SaaS solutions, you might as well glance through our list.

Product-led Growth – Adopting Growth Strategy Centred Around Product

The start of the millennium saw SaaS companies guided by sales-led growth which was then replaced by market-led growth in the years to follow. Here’s a small picture.

During SaaS 1.0 (sales-led), you would have had your potential customers interact with a salesperson, who in turn would assist them to buy the best product to meet their exact needs. Saas 2.0 concentrated on marketing campaigns to procure customers and drive growth. Well, I know of certain that both the methodologies were driven by lagging, time-consuming procedures of convincing and educating the customers.

But today, customers are well aware of the features and requirements a product should have to match their needs, thanks to the internet. Most of the consumers want to self-educate. In fact, a report by Forrester, states that 75% of customers prefer to buy a product via an app or website. They don’t need a salesperson or marketing campaigns.

Well, when that’s the case, it shouldn’t have come as a surprise when both sales-led and market-led growth started fading away with the last decade. And that’s when product-led growth came into the picture. In the last few years, companies like Zoom and Slack have brought about quite a disruption in the industry by featuring a product-led growth. Henceforth, Saas trends have been changing.

SaaS Trends 2020 : Product-led Growth
Source: Product-Led Growth

Customers can now experience the product before buying them. A bottom-up sales pattern is implemented. Customers can try out the product (through free trials and plans), understand how it works, keep track of the features offered and then choose to upgrade and engage in the sales process.

Well, in short, the buyer acquisition, conversion, expansion and retention are all essentially facilitated by the product to help drive cost-efficient yet exponential growth. The product-led growth dominated Saas for the last few years and judging by the impressive revenue and popularity that the business methodology’s been garnering, it is here to slay the new decade!

Vertical – Specific – Transitioning From a One-stop-Solution to a Dedicated Solution

A major part of the last decade exhibited SaaS companies focusing on becoming a one-stop-shop for a broad range of business functions like sales, HR, accounting etc. The horizontal approach may have addressed a wide range of areas but it did seem a bit overwhelming for a section of the clients.

SaaS Trends 2020 - Vertical SaaS
Source: TrustRadius

Customers needed software that addressed their specific needs so that they have a dedicated solution. Well, then that led to a new Saas trend in the later part of the decade. Companies started following a vertical-driven solution where software was created to address the specific needs of the industry. Firms like Zenoti and Veeva are the finest examples of the aforementioned. They delivered solutions to address the requirements of a particular vertical.

Needless to say, the approach did decently well, procuring them more upselling opportunities, improved data governance, higher retention rates and low churn rates at lower customer acquisition costs. Moreover, this penetrative approach will aid in increasing flexibility and delivering personalized experiences to the clients. So, this is our next prediction for Saas trends 2020; enterprises are going to embrace the vertical-specific approach.

AI & ML – The reason for movement from a System Of Record to System Of Intelligence

Artificial Intelligence has fortified human capabilities to increase efficiency and productivity. Today, you don’t need to keep a record or manually perform repetitive tasks, AI has got it covered for you. AI-optimized Saas solutions of enterprises like Salesforce has brought about tremendous improvement in speed, responsiveness, automation and even security. AI-powered chatbots, which is now widely adopted by various Saas organizations have helped take customer service a notch higher, owing to its speed and personalization capabilities.

SaaS Trends 2020_ AI adoption.

The ascent of AI has powered a massive disruption in the industry since 2017 and without a shadow of a doubt, AI is going to prevail through this decade. The decade will give rise to AI-driven Saas enterprises rather than offering AI as a feature alone. And what’s more? Studies say that AI will prove to be the silver bullet of Saas solutions that can garner a 14% higher global GDP by the end of the decade!

Hybrid Cloud Adoption –  Streamlining a Secure Business

Most of the last decade saw software that was client/server dominated. The application would be run by the client and the server ran the database. Then the EU’s GDPR became a part of Saas trends. But as we neared 2020 more Saas companies started rooting for hybrid cloud delivery. Hybrid cloud is an integration of public and private cloud.

Hybrid Cloud Adoption - SaaS Trends 2020

Saas companies can now opt to place their data as per the security requisites, audit or policies thereby leveraging cost-effective public cloud and simultaneously store confidential data in a private cloud. Such a cloud trend has not only simplified business but also helped secure data efficiently.

Bottom-Up Sales – Narrowing Down to End-Users

Top-down was the conventional method followed by Saas companies until a few years back. In the top-down methodology, a model is sold to the C-level executives of an organization through a single sales process. Well, when it comes to such an approach, the buyer needn’t always be the user and the implementation process might take a while.

But lately, we’ve seen a bottom-up trend in SaaS, wherein targeted groups of end-users are focused. There may be more than a single sales process involved but the entire cycle of each procedure is shorter. Here a user can be given a trial, and then converted to paid.

SaaS Trends 2020 - Top-Down vs Bottom-Up.
Source: HowToSaaS

With such a process in place, SaaS companies especially startups get a chance to AB test based on which the engineering, marketing or sales processes can be carried out. Companies have been able to better their product in the efforts to simplify the challenges reported by the users. Well, looks like the bottom-up trend is all set to lead the next ten years of SaaS.


SaaS Trends Transition from 2010 to 2020 .

The growth of SaaS is not expected to cease anytime soon. In fact, according to the Saas trends of 2019, we can expect Saas enterprises to flourish rapidly throughout this decade. Digitization is taking over the world and the need for Saas solutions has never been this high. There is no better time to tap the possibilities and to be ahead of the curve, which is exactly why you should be aware of the SaaS trends of 2020.

Shihab Muhammed

Founder & CEO at SurveySparrow

SaaS Entrepreneur, Growth Leader, Built and scaled multi-million dollar SaaS products. Passionate about building user-friendly SaaS Products.

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