7 SaaS Industry Trends for 2022
~5 minutes read
The Software-as-a-Service (SaaS) model skyrocketed in popularity during the last few years, as it offered innovative solutions for a wide range of industries. Analysts claim that the SaaS market will grow at 12% each year, and by 2022, the volume of investments will reach approximately $141 billion. Therefore, as companies continue implementing SaaS into their operations and product distribution, it is better to be aware of and follow the latest trends in the SaaS industry.
In this article, we’ll take a closer look at the 7 SaaS trends for the year 2022 and will discover what the future holds for this type of service model.
Trend 1: Vertical SaaS
To start with, the main difference between horizontal and vertical SaaS lies in their focus: horizontal SaaS provides solutions to a great number of businesses, while vertical SaaS offers services that aim to attract a narrower audience, typically within a single niche.
Considering the benefits of vertical SaaS, it’s no wonder that the number of such products is rising. First of all, this type of SaaS model gives companies the opportunity to acquire the target audience using unique features created for a definite market segment. Secondly, the vertical SaaS provides solutions to the exact problems of a specific industry, without trying to solve the issues of numerous industries all at once. Additionally, vertical SaaS supports extensive customization, can quickly adapt to trends and serve the changing needs of the industry.
Trend 2: Micro SaaS
One of the possible ways to adapt to the competitive SaaS environment is to create a small and flexible tool that is planned to be run by a tiny team or even by a single person.
Micro-SaaS products often serve as an addition to the larger SaaS platforms. You can view similar products almost everywhere: on retail platforms (for example, Amazon Assistant for product comparison), SEO services (for instance, Yoast SEO plugins for WordPress). Some Micro-SaaS products like Grammarly are presented as browser extensions.
Micro-SaaS products creation and development typically require low costs and no outside funding. That is why a lot of start-ups develop exactly Micro-SaaS products. Besides, micro SaaS can operate remotely from almost any location and still generate high margins. All these benefits, combined with low overheads, have stimulated the massive interest in MicroSaaS solutions.
Trend 3: Artificial Intelligence (AI)
Artificial intelligence (AI) is considered to be one of the most remarkable game-changer technologies and SaaS trends for 2022. According to a Gartner survey, the expected increase of cloud AI in 2023 will be five times higher than in 2019. Companies like Salesforce and IBM have already set the AI-optimized SaaS solutions trend.
Artificial intelligence technology is widely used as it:
- creates highly personalized apps and customizes them according to the users’ convenience and behavior;
- provides an improved security system so that you can easily detect and prevent data leaks, cyberattacks, and other threats;
- automates various processes that used to be performed manually;
- enables companies to improve the decision-making processes, optimizes the length of research and development cycles, and creates sophisticated management strategies;
- can predict which products will hit the market soon and become popular among different audiences.
Some of the brilliant examples of SaaS products using AI are Remove.bg, which automatically removes the background from images, as well as Flowrite, which creates copy for emails and collaboration tool messages.
Trend 4: Machine Learning (ML)
Machine Learning (ML) and AI are often considered to be synonyms but in fact, they are not all the same. To be more specific, machine learning is a subset of artificial intelligence that focuses on learning capabilities and data processing.
Machine learning technology allows for identifying patterns in customers’ preferences and habits. Using this information businesses can make calculated moves for improving products’ usability which brings higher engagement and retention rates.
MI also helps companies stay at the top of the competition by telling businesses how their offerings and market positioning should be optimized based on large amounts of contextual data processed.
There are numerous excellent examples of MI-based SaaS platforms. For instance, Zendesk is a sophisticated CRM system that helps sales teams to identify trends in clients’ behavior. Spotify also uses machine learning to create its personalized song suggestions.
Trend 5: Mobile-first approach
According to CNBC, 72.6% of people will use smartphones for communication, work, and surfing on the Internet by the end of the year 2022. Also, according to another study by eMarketer, the average person spends over 120 hours per month staring at their smartphones.
Many entrepreneurs run their businesses from their smartphones, not even mentioning that a huge number of employees use mobile phones to have their job done – it’s easier and faster that way. SaaS vendors took this paradigm shift into consideration and continue creating and improving mobile apps for their tools and services in the first place.
There also comes a wide array of challenges, especially from the design perspective – companies should decide how to create interfaces that will satisfy users’ needs, as well as facilitate app usage for people suffering from sight and hearing impairment.
Trend 6: Low–code
Low-code is a technology of developing an application with minimal coding. Many businesses are considering this approach, and the SaaS industry isn’t an exception. According to a Research and Markets report, the low-code industry could be worth $190 billion by 2030.
Low-code or even no-code platforms’ benefits include:
- Increased accessibility to the average user
Those kinds of platforms allow non-tech startups to enter the market and diversify it.
- Less time and money spent on development
Saved on development resources can be used on addressing the industry’s most concerning issues.
Some of the famous low-code app examples include Webflow and Typeform. Even if they’re not enough to create an entire application, you can use a low-code platform to build a lot of the key features that you want in your software product, and then manually code the rest.
Trend 7: Customer retention
Semruch study has shown that 44% of businesses focus on customer acquisition while only 18% focus on customer retention. However, just a 5% increase in customer retention can double organizational revenue. So, nowadays SaaS companies try to follow one of the SaaS trends for 2022 – pay closer attention to customer retention and churn reduction.
Companies can use the following practices to improve customer retention and reduce churn rate:
- User onboarding emails;
- 24/7 support;
- Video instructions and tutorials;
- New feature notifications;
- Improving the overall customer experience.
A greater focus on retention and churn goes beyond the basics of developing a product, it’s more about improving the life quality of your customers. If you’ll be able to accomplish this task and make a significant difference in your customers’ lives, the churn level will go down, and you can continue running, improving, and growing your company.
To sum up
The main reason for the growth of SaaS applications usage was the pandemic that facilitated remote work. However, it’s obvious that SaaS will continue to evolve even after workers return to the offices. Experts believe that 75% of companies will use all or almost all applications only in the form of SaaS by 2022, as business executives enjoy the benefits cloud applications are capable of offering for a fair price.
To continue getting the most out of your SaaS portfolio try out the Binadox platform. It provides both management and cost optimization features. SaaS Utilization Dashboard allows businesses to identify their tool consumption patterns and make more accurate decisions concerning future licenses purchase.
Additionally, Binadox can help your organization avoid unnecessary SaaS expenditures by reminding you about your next renewal and sending you cost-saving recommendations.
It’s time to take control of your SaaS environment. Sign up for a 14-day free trial and make innovation, intelligence, and growth your priorities in 2022.