Although 2012 has been heralded as “the year of SaaS” by acclaimed venture capitalist Marc Andreessen and others, 2013 promises to bring even greater growth to the software-as-a service (SaaS) app marketplace.
Speaking at GE’s Industrial Internet event last month, Andreessen noted that SaaS is nothing new, but predicted that the tide of companies switching to cloud-based enterprise applications will grow rapidly in the New Year. There are several forces behind the explosive growth in the SaaS app marketplace.
More Non-IT Professionals Are Purchasing New Technology for Their Companies
Evidence indicates that SaaS apps are gaining greater momentum as more non-IT professionals have taken over the role of purchasing technology for their companies, including mobile devices, file-sharing clouds, and SaaS apps (such as online retail accounting system CounterBooks). IDC, the premier global provider of market intelligence, forecasts that non-IT business managers will purchase 80 percent of new technology directly for their teams. In an effort to address business challenges and reach their revenue goals, these managers have quickly recognized how SaaS apps can make their lives easier, while helping them win new customers.
The Complementary Growth of the Mobile Marketplace
Complementing the SaaS surge, IDC recently reported that sales of smart mobile devices (including smartphones and tablets) will grow by 20 percent in 2013, generating 20 percent of all IT sales, and driving a whopping 57 percent of all IT market growth.
With more small and medium-sized businesses (SMBs) setting up their SaaS applications on mobile devices, such as iPhones, iPads, and Android devices, the use of these devices has become more prevalent in essential, daily business operations. These companies are demanding better ways to employ mobile technology to increase business efficiency, and SaaS app providers are answering the call.
SaaS Shifting Away From Being Simply Extensions of Existing Applications
Globally, there has been a shift observed in the adoption of SaaS apps from primarily being extensions to existing applications, to being new deployments or replacements of existing on-premises applications.
Businesses have dramatically increased their SaaS use over the past three years, according to a global Gartner research survey. Nearly three quarters (71 percent) of the 399 organizations surveyed by Gartner have been using SaaS apps since 2009. Individual businesses are making greater use of SaaS, Gartner claimed, with adoption patterns shifting from using SaaS as a way to extend on-premise applications to replacing applications with cloud alternatives.
The reasons for deploying SaaS vary worldwide. Asia-Pacific companies are deploying SaaS to access applications for the first time, while there is a growing trend for businesses in the US and EMEA to use SaaS to replace legacy applications.
Supply chain management, web conferencing, and social software suites were the most common services chosen by companies replacing on-premise systems. CRM and enterprise content management systems were the most common applications used for new deployments.
The Emergence of Smaller, Specialized SaaS Companies
As emerging and Fortune 500 businesses alike increasingly recognize the value and utility of SaaS apps, another emerging trend is the growth of smaller, specialized SaaS app companies. A lot of new cloud technology has recently been developed, making it easier and more cost effective for anyone to build a cloud-based application.
This trend suggests that in 2013 a whole new series of specialized SaaS apps will arrive to serve specific industry verticals, such as banking, hospitality, healthcare, and more.
Responding to Market Demands
With the growth of the SaaS app marketplace, small and medium-sized business owners have become seemingly overwhelmed by the opportunities that lie before them. A recent Techaisle survey found that 69 percent of respondents prefer to purchase their cloud-based applications from a single trusted vendor, while 40 percent have noted a lack of training when employing their apps.
At SaaS Markets, we have answered the call of SMB owners and will continue to do so in 2013. Leading financial institutions, technology companies, retailers, business associations and global brands are increasingly turning to us to create their global app stores, designed to make employing the right SaaS apps for their business needs seamless and simple.