Although it looked much different then than it does today, SaaS (or software as a service) has been a business model since the 1960s. At that time, SaaS was essentially a “time sharing system” that allowed small to mid-sized businesses and other kinds of organizations to access a computer system, which would have been otherwise impossible. Fast forward to 1999 when Salesforce’s CRM became the first ground-up SaaS solution to achieve record growth. And now, more than 20 years later, SaaS has become an everyday part of our vocabulary.
But is SaaS still relevant? The short answer is yes—SaaS is still relevant. Although the industry, and its offerings, are likely to change and morph in the next several years as we develop and implement new technologies. This is precisely why attending a cross-sector SaaS conference like Rally can be so helpful. These kinds of B2C and B2B SaaS events give movers and shakers the opportunity to learn, connect, network, and ideate to drive innovation across SaaS and other key industries.
Is SaaS Still Growing?
Yes, by virtually all indicators, SaaS is still growing. According to The Insights Partners, the global SaaS industry was valued at USD 167.53 billion in 2022. That number is expected to grow to USD 462.94 billion by 2028, which represents an 18.5% compound annual growth rate (CAGR).
Of course, this isn’t the only way to identify SaaS industry growth; we can also look at growth by the number of SaaS companies. Zippia reports that there are an estimated 30,000 SaaS companies globally—with roughly 17,000 of them located in the United States. And, new SaaS innovators are entering into the market nearly every day.
With 99% of new companies estimated to use one or more SaaS products by the end of 2023, as reported by Zippia, it’s safe to say that the SaaS market—and our reliance on these solutions—is still relevant. But how can we make sure that this industry stays this way? By keeping up with trends and opportunities in the SaaS market.
What Is the Future of the SaaS Market?
The future of the SaaS industry depends on the creation of innovative tools that empower and improve experiences for businesses and consumers alike. What does that look like, and what can we expect from SaaS trends in 2023 and beyond? Here are five trends to keep an eye out for.
- The Adoption of Cloud Migration Will Expand: Cloud services bring many benefits, including scalability, flexibility, reliability, and collaborative functionality. These advantages—and many more—are critical to today’s modern hybrid and remote business models, which is part of the reason why cloud migration is expanding so rapidly. In fact, one of the SaaS trends that Gartner recently pointed out is that end-user spending for public cloud services is expected to grow by 20.7% in 2023. Cloud system infrastructure services (IaaS) and cloud application infrastructure services (PaaS) are growing particularly fast.
- Data and Analytics Will Become Critical: Today’s decisions can’t be made without good data. Yet, in a world where 2.5 quintillion (that’s 18 zeroes) bytes of data are created every day, it’s impossible to sort through it all manually. Fortunately, big data analytics, predictive analytics, and other technologies are here to transform the way businesses collect, store, and analyze their data. When used effectively, these technologies can power better decision-making across an entire organization, including sales, marketing, customer experience, product development, and so much more.
- AI and ML Will Drive Innovation: Artificial intelligence and machine learning technologies have already become deeply integrated into our daily lives, and there’s no sign of that slowing down. AI and ML tools have the potential to drive things like natural language processing, workflow efficiencies, enhanced cybersecurity threat detection, data analysis, and so much more.
- Low-Code and No-Code Will Persist: As business and consumer expectations shift, companies must adapt to stay agile. Low-code and no-code applications and interfaces enable businesses to make changes to their applications quickly and easily—with minimal to zero coding knowledge. These drag-and-drop solutions make it easier for marketing teams, for example, to maintain websites and apps, so their IT teams can focus on more complex tasks.
- Vertical SaaS Will Grow: Especially when it comes to B2B SaaS trends in 2023 and beyond, vertical SaaS is anticipated to grow. Whereas horizontal SaaS focuses on providing solutions across sectors, vertical SaaS solutions are hyper-personalized on a specific industry. These platforms are designed to better target specific industry niches and needs. This trend, in particular, requires deep knowledge of a single industry vertical. Collaborative, networking experiences—like those offered at Rally—can help founders build those connections quickly and effectively.
Where Can You Learn About the Future of SaaS? At Rally
At Rally, we set out to build a cross-sector innovation conference that connects companies, entrepreneurs, investors, and thought leaders from across the world. We believe that only through networking, education, and true connection can we continue to build innovative solutions to some of today’s most complex and pressing challenges.
With tracks for Software, Ag & Food, Healthcare, HardTech, SportsTech, and Entrepreneurship, Rally offers experiences in some of today’s hottest industries. And, we’re investing up to $5 million in cash in our Rally IN-Prize pitch competition!