Software-as-a-Service (SaaS) is one of the fastest-growing niches in technology. These solutions enable you to access and use data from any device connected to the Internet. As a result, companies have more flexibility in their day-to-day operations than ever.
Today, SaaS integrates into nearly every facet of the business. SaaS apps have increased agility, accessibility and cost-effectiveness in the workplace throughout their evolution. But as the competition and features grow, so do customer expectations.
As such, the SaaS market shows no signs of slowing. An estimated 85% of applications in use by companies will be SaaS-based by 2025, with the market growing to $225 billion. The market is projected to grow 17% in 2022 alone to end the year at $172 billion.
With that said, let’s look at the exciting SaaS trends set to break the mold for 2022.
The adoption of artificial intelligence and machine learning
Artificial intelligence is one of the hottest trends out there – and it’s no surprise that it’s a darling of SaaS applications. This is true on both the front and back ends of such applications.
For instance, AI helps software developers automate their work and increase efficiency. And on the client-facing end, AI can:
- Speed up productivity.
- Allow for more personalization.
- Improve how businesses use, interact with, and migrate data.
- And even enhance data security measures.
Machine learning is a subset of AI that also shows plenty of promise. For example, it can enhance data processing to help businesses learn about customer habits. And more advanced models can feed AI contextual data and receive actionable marketing insights on the other side.
Though true artificial intelligence is years away, today’s algorithms can still augment human abilities. From chatbots to AI writing software to price prediction, AI makes business run smoother. The disruptions can be felt across industries, whether you’re using AI to build your startup or to protect data stored in the cloud.
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Mobile-first SaaS
It’s estimated that 72.6% of people will resort to a smartphone-based 2022 for communication, work and Internet access. A study by eMarketer found that most people spend at least 120 hours per month staring at their screens.
But average people aren’t the only ones relying on their mobile devices.
For instance, business owners are increasingly turning to mobile devices for company use. And as the world shifted from corporate to home offices, this led to a rise in BYOD policies and supporting mobile-first SaaS applications. Many computer-first applications also adapted to help with mobile communication and project management.
Of course, mobile-first SaaS does present some challenges. For instance, many designers will have to build products with seniors, sight- and hearing-impaired users, and those with neurodiverse needs in mind.
But mobile-first SaaS solutions could also solve some of these same problems by:
- Enhancing accessibility features.
- Providing mobile personalization.
- And making AR- and VR-based mobile experiences possible.
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A focus on the customer experience
It’s no secret that SaaS apps can help you build a great user experience for both employees and clients. But products that don’t deliver often result in negative customer feedback. As such, purchasing software from providers that make business easy and pleasant is often a top priority.
One result of this need is a shift toward products that support customer-centric focus. This may include both back end and customer-facing features like:
- More personalization and customization.
- Integration and API capabilities.
- White labeling.
- Simplified interfaces.
Many SaaS products have spent the last year enhancing their services to serve current clients better. By improving the user experience, SaaS apps can help you see increased conversions, decreased churn, and higher profits.
More vertical SaaS sroducts
Turning toward vertical SaaS is one way that apps are increasing customer satisfaction. If you’re unfamiliar with the concept of vertical versus horizontal apps, the distinction is pretty simple:
- Horizontal SaaS products cast their net far and wide. These are usually generic products designed to target and serve as many clients and fields as possible. Salesforce CRM is a well-known horizontal SaaS app that helps clients with their customer relationship needs.
- Vertical SaaS products stack their features to serve a targeted niche. Many vertical SaaS apps strive to be “all-in-one” solutions to help clients from top to bottom. The Epic EHR patient portal is one example of a vertical SaaS app.
Historically, most SaaS software began life as a horizontal product. But as competition rose and clients became more demanding, many have turned to vertical stacks. In turn, this allows companies to scale with SaaS more effectively.
Vertical SaaS models come with many advantages for both developers and clients, like:
- Running fewer marketing campaigns to get new clients
- Increased versatility to serve user and customer needs
- More relevant features for smaller businesses
- Fewer competitors targeting the same industry or niche
- Increased customer intelligence and data governance
Additionally, vertical SaaS has proven easier to customize. This is an added boon for companies that can now purchase fewer platforms to achieve the same results.
Integrations galore
The rise of integration abilities is linked to past limited SaaS connectivity. One or two apps that don’t work well together are frustrating but not the end of the world. But business has grown far beyond the use of just a handful of apps.
For instance, it’s estimated that businesses with over 1,000 employees use at least 150 SaaS apps. Meanwhile, companies with fewer than 50 often subscribe to at least 16. With so many apps in use, communication between apps is a must-have. Without clean integrations, your IT system may experience issues with:
- Billing.
- Data use and migration.
- And interoperability.
Nonintegrated apps also lead to security risks and hinder your ability to monitor performance. As a result of these problems, customers often turned to third-party apps. While this solves their integration issues, it can lead to increased costs and data privacy concerns.
For these reasons, the demand for hybrid support and app integration is immense. In fact, modern SaaS solutions often boast seamless integrations (even if they don’t always deliver).
But businesses need apps that they can trust – and that work with their current tools. That’s why integration abilities are high on the list of SaaS trends for 2022.
Micro-SaaS apps flood the market
If a vertical niche provides everything you need, then micro-SaaS is the exact opposite. Instead of selling a whole platform, micro-SaaS developers create an add-on to augment your software.
These “micro solutions” can either enhance a platform’s core features or provide a new one altogether. As a result, they can help you maximize the value of your SaaS tech.
One area rich with micro-SaaS is the content curation and management arena. You’re probably familiar with the biggest players in the space: WordPress, Wix and Squarespace, to name a few. Because the field is dominated by so few names, it’s almost impossible for smaller developers to make a dent with a whole new platform.
That’s where extensions, browser add-ons, plugin integrations, and accessories come into play. For instance, the Yoast SEO plugin for WordPress helps you to identify backlinks and keywords.
Meanwhile, the Grammarly add-on helps you write for your audience. And micro-SaaS “themes” can make your site look its very best.
The reason micro-SaaS is a key SaaS trend for 2022 is the sheer (lack of) effort involved. While you need some tech know-how, they require a little upfront cost, so developers don’t need to seek outside funding. Additionally, these platforms:
- Are location-independent.
- Have high profit margins.
- Come with little overhead.
- Requires a staff as small as one person.
- And promote direct customer contact.
To sum up: If developing standard SaaS is best left to big business, then micro-SaaS is for the little guys. Due to the inexpensive nature of making and selling these platforms, they’re likely to dominate the arena in the coming years.
The switch to Platform-as-as-Service (PaaS)
As SaaS apps flood the market, each company has to stand out from the crowd to get noticed. Recent increased competition has led to a boom in new and enhanced features and services.
However, as customers have benefited, they’ve come to expect more from their products. This cycle makes it tricky for some services to retain their clients.
One way that SaaS providers adapt to meet this demand is by combining vertical SaaS, micro-SaaS and integrations. This so-called Platform-as-a-Service (PaaS) is the next frontier in software development.
PaaS empowers clients to purchase or develop their own custom apps. These then become integral add-ons that help developers serve their clients’ needs while enhancing flexibility.
The urge to launch new PaaS-centric solutions doesn’t just reflect a desire to control the market or keep customers. The benefits also play a key role, as these platforms tend to:
- Be more robust.
- Increase accessibility.
- Help clients control their company expenses.
- Offer more value for the money.
- Skyrocket customer loyalty and retention.
Additionally, PaaS helps companies scale their business and increase security. While companies like Box and Salesforce set the pace for this new trend, they’re not alone. This SaaS trend for 2022 is just getting started.
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Unbundling SaaS apps
Many SaaS products aim to provide “the full package” to their customers in the modern era. While enterprise clients may benefit from this approach, small businesses are disadvantaged.
To start, many small businesses have to balance features against increasingly-higher price points. And while they may eventually need the complete package, having an entire industry’s worth of features at their fingertips is overkill – and expensive to boot.
That’s where unbundling comes in. This trend became especially popular during the pandemic as companies moved to work-from-home arrangements.
With unbundling, SaaS solutions break down their platform into its core functions. Then, it packages these functions into an API with a few add-ons that operate in unison. And instead of targeting developers, they sell to small businesses that need to create a set of internal tools.
Unbundling helps small businesses customize their software to their needs. And by offering their core services, SaaS platforms still make a profit – and sell optional extras on the side.
Rethinking common pricing models
Many SaaS apps rely on subscription pricing models to generate revenue. With subscription pricing, apps set a simple monthly or annual fee system that makes pricing simple and profitable. Companies may also include several pricing tiers based on their different features.
This model has led to the rise of affordable products that help businesses scale as they grow. For example, cheap email marketing is possible due to the subscription model. Many marketers stick with the same product for years, paying a little more as they increase their subscriber list.
But it looks like this pricing model may be evolving to provide customers with more choices. As firms rethink customization and profits, many SaaS platforms are switching to a transaction-based model. In this pricing structure, clients pay every time they use the app or certain features.
Transaction-based models often prove more cost-effective for customers who use a particular app or feature as needed. At the same time, the SaaS developer still brings in a profit and reaps the rewards of customer loyalty.
Another pricing structure on the rise is the single-purchase model. While it’s more expensive upfront, some standalone SaaS products are cheaper long-term when users purchase a lifetime license. This is particularly true of micro-SaaS products like Yoast SEO.
SaaS trends: What to watch for
SaaS is a hot topic for a good reason. As the race to digitize business heats up, IT experts have rolled up their sleeves to produce some of the most innovative software available. And now, businesses will benefit from their collective efforts.
Based on the trends we’re already seeing, it’s safe to say the SaaS market is still in its infancy. The rise of remote work has been a much-needed driver to speed up growth, resulting in:
- The adoption of AI in making and using SaaS products.
- A push toward mobile-first apps.
- New customer-centric business models.
- Increased integrity and performance tracking in remote teams.
If you’re ready to expand your tech portfolio, look toward these SaaS trends for 2022 to guide your research. And in the meantime, it’s wise to start equipping your team with the tech-forward skills to use them.
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June 4, 2022 at 12:07AM by Jan Kuzel, Khareem Sudlow
