SaaS Market Rapid Growth in 2021: What to Expect?

Since its inception, software-as-a-service (SaaS) established a market that would expand. The advantages that SaaS offers, such as accessibility, reliability, and overall cost-effectiveness, make it a very appealing cloud solution to many companies, and it’s expected to continue growing rapidly in 2021 and beyond.

By using the cloud, users can be connected through a centralized platform within a company’s suite of services. Additionally, it takes a minimal amount of time for startup and maintenance processes to be administered.

While some IT departments still prefer on-premise solutions, the massive shift to remote working over the last year has likewise caused a general shift in that thinking. Company budgets are also experiencing massive strains due to COVID-19 and SaaS is becoming a more attractive, affordable, and powerful option.

With this in mind, many companies will see a growing focus on having SaaS as part of their operating expenditures.

How the 2020 pandemic has shaped SaaS trends for 2021

An increase in digitally-enabled customer and supply-chain products has also accelerated demand for SaaS solutions. Reports indicate an upward trend in demand and usage of SaaS technologies. Compared to other cloud services, SaaS is the most employed cloud model, with an estimation that the global market for SaaS will reach over $300 billion in six years. 

Companies are acting on lessons learned from the 2020 pandemic. The end of 2021 will find an even high percentage of businesses shifting to a cloud-centric infrastructure. This will highlight the difference between implementing cumbersome legacy systems and the ease of SaaS solutions.

This will increase opportunities for companies to embrace SaaS products that are able to offer many features that will help them provide better customer service, keep on track of employee performance, and automate mundane tasks. As an example, it’s now become commonplace for companies to host customer service platforms on SaaS cloud platforms rather than physical servers in order to ensure key processes including 24/7 monitoring, regular backups, and immunity to hardware failures. 

Every industry has felt the operational and market impact brought on by the pandemic in 2020, and the surge in market demand for SaaS solutions is expected to continue into the post-COVID-19 era.

More companies are embracing resilience and adaptability

The economic contraction from COVID-19 has accelerated the need for more companies to be as resilient and adaptable as possible. One result of this is a shift to remote work for the foreseeable future. 

With more companies making this pivot to a virtual environment, their need for SaaS-based offerings will continue as they adapt to this new reality. As cloud computing expert Barbara Ericson of Cloud Defense notes, “Many people and companies are turning to SaaS since it allows individuals and companies to acquire software more quickly, to benefit from patches more consistently, and to benefit from additional security measures that prevent the software from being altered or negatively affected.”

Furthermore, as many businesses start to experience the advantages of working remotely, SaaS providers will need to respond to this trend with systems that support remote work in 2021 and beyond with digital tools that facilitate collaboration and communication across all industry sectors.

Implementation of SaaS solutions will also minimize upfront and ongoing costs associated with business-related software. In addition, companies will have the ability to switch providers whenever necessary. With SaaS, they can avoid rigid contracts that discourage flexibility.

It’s largely for these reasons that over 80% of organizations are expected to have the bulk of their software needs met by SaaS by next year. As a result, traditional enterprise software providers will need to offer technology models that fit this growing business need and remote working trends. Remaining competitive will also mean keeping pace with the ever-changing expectations of the business consumer.

More opportunities for sector-specific vertical solutions

A growing trend towards SaaS brings more opportunities for vertically focused solutions. It is necessary to utilize software that can cleverly target specific pain points for different industries. SaaS providers will need to offer more purpose-built options for specific sectors.

Essentially, this will deliver more value to industry-specific businesses as they benefit from having solutions targeting their specific needs. In addition to improving business outcomes, companies can gain better consumer insight while improving data governance.

Vertical SaaS solutions can also adapt to a remote working society going through changes and disruptions over the past year by providing software choices that understand this issue. 

The convergence of B2B and B2C

Another expectation for the rapid growth in the SaaS market is a convergence between business-to-business (B2B) and business-to-consumer (B2C) companies. For years, the development and distribution of innovative applications were found in the B2C space.

Today, these dynamic solutions are also found in B2B technologies thanks to the widespread adoption of SaaS. Business software products are experiencing more consumerization because of the advantages this type of solution provides.

SaaS providers are wise to offer more high-quality flexibility that matches the expectations of users in the B2B space. Versatile, user-friendly products, along with open-ended servicer agreements, are making a critical difference in a saturated market.

Conclusion

Success in meeting the demand of rapid SaaS growth requires enhancing essential business user features. These include strong SaaS help desk support, flexible contracts, and low cost of entry. Added to these features is an intuitive digital platform that meets industry-specific needs. 

Include helping employees remotely collaborate, and SaaS companies stand a good chance of achieving the number one position for 2021 market drivers. The market can expect to see this digital transformation grow, making SaaS an engine of innovation and productivity for all industry sectors. Meeting accelerated demand means SaaS will permanently reshape how companies use technology. 

(Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)