After the impact of the pandemic, the SaaS solutions market is beginning to recover, especially thanks to the demand for vertical solutions, which is expected to experience strong growth in the coming months.
Global demand for vertical software-as-a-service (SaaS) solutions is experiencing a strong recovery that contributes to forecasting significant growth in the SaaS market in the coming months.
This is clear from a recent study by ISG (Information Services Group), which highlights the significant recovery of this market after the significant slowdown it experienced during the worst months of the pandemic. And this situation led to a large number of organizations that switched to cloud solutions to keep in touch with employees and customers remotely.
However, the firm notes that companies around the world continue to migrate from licensed proprietary software to SaaS subscriptions as they seek innovation, a better user experience and lower cost.
According to the report, this will predictably lead to the value of the combined annual SaaS and infrastructure as a service (IaaS) contract growing by 21% in 2021.
Additionally, ISG expects organizations to increase their spending on core business applications such as enterprise resource planning (ERP), human capital management and customer relationship management, which are increasingly being delivered and billed as SaaS subscriptions.
It is precisely these types of applications that can help, and have helped, companies to continue operating during possible interruptions that a business may suffer, as happened with the arrival of the COVID-19 pandemic.
Looking ahead, the report’s forecasts point to companies launching major projects in the next 12-18 months aimed at business continuity, centralization, cost optimization, and increased collaboration and visibility.
In addition, organizations are expected to adopt SaaS solutions for an even broader range of applications as, as Bill Huber, ISG Partner for Digital Platforms and Solutions argues, companies in all industries are adapting their systems to take full advantage of the digital capabilities.
SaaS provider Consolidation
In this context, vendors are focusing on developing out-of-the-box integrations for specific industries and meeting key performance indicators (KPIs) for each industry.
According to ISG, one of the main drivers of SaaS growth is the availability of modern application programming interfaces (APIs) to facilitate integration by allowing channel partners and integrators to combine applications to meet the needs of specific customers. Additionally, this shortens the time to market for new offers, allowing providers to focus on their core capabilities.
Another highlight of the report points out that the personalization of mobile applications is emerging as a key trend for SaaS providers seeking to offer a better user experience, with embedded machine learning and artificial intelligence configured to offer greater insights through mobile dashboards. .
In addition, it is also noted that, although the SaaS marketplace has an increasing number of players, including small niche providers, the consolidation of the industry is expected to continue. In fact, ISG notes that almost all of the companies that participated in this study have acquired smaller suppliers in the last three years.
Therefore, when considering working with a SaaS provider, the customer should take into account the possibilities of the company being acquired and the support options it offers.