Sunday, January 10, 2016

Three enterprise SaaS trends for 2016

Which direction are the clouds moving? Here are three interesting enterprise SaaS trends that I like to follow:

1. SaaS production is standardized and integrated

Thanks to early pioneers of SaaS, internet is now full of ready-made tools for SaaS vendors. Easy-to-use APIs, SaaS application platforms, market places, easy-to-implement payment gateways and even better educated customers. Practically every new enterprise software startup chooses a SaaS delivery model with de facto methods: Subscription based pricing, scalable multi-tenant architecture and fully automated online sales processes. Interesting thing is that it’s not only SaaS - it’s the whole “subscription economy” in B2B world that is following these same patterns.

2. Vertical solutions for each niche market

As market size and penetration of SaaS accelerates, more customers are able to get the benefits. Standardised technology, tools and delivery processes make it possible to create more focused SaaS products with less resources. Horizontal solutions such as generic CRMs, collaboration platforms or marketing tools are facing tough competition, while industry specific solutions and ERPs provide endless opportunities to create new business with significant profit. Might make huge enterprise SaaS unicorns more rare, but mid-sized SaaS vendors and B2B startups are living the time of their lives.

3. Pricing is getting back to realistic levels

Thesis, antithesis and synthesis. This pattern can be found everywhere, also in enterprise software pricing. It was a huge jump from late 90s expensive upfront IT investments into consumerized freemium SaaS services. This generated a lot of new startups, from which 99% died before they figured out how to make money. Fortunately the era of freemium-first is finally left behind and serious enterprise SaaS startups try to figure out how to make money since the day zero after launch. For customers there’s no free lunch anymore, which in turn means better quality, better services and more realistic basis for doing business.

SaaS is getting into mature age. The first windows of opportunities have already closed, while new windows are opening with cool concepts such as machine learning, blockchain (technology behind bitcoin) and integrated cloud-native development routines. SaaS enterprises are living interesting times indeed.

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