The landscape of software as a service industry is in constant flux. As its market value grows and more solutions are created every day, founders are searching for the optimal formula to give their companies a much-needed competitive advantage.

This article will provide you with essential knowledge about some of the biggest trends in the SaaS industry in 2021. Being aware of them can put you ahead of the game and provide a space for you to flourish.

If you’re a SaaS operator who wants to bring a product into the new decade or a startup founder looking for their next big break, the items on this list will give you a strong starting point toward success.

Let’s dive right in.

TABLE OF CONTENTS:
Artificial Intelligence
Machine Learning
Centralized Analytics
Vertical SaaS
White Label SaaS
Micro-SaaS
Low-Code SaaS

Artificial Intelligence

Artificial intelligence (AI) is slowly becoming an integral part of our lives. It has also revolutionized the way the SaaS business operates.

SaaS products are delivered online and can serve millions of customers at once. AI allows the SaaS industry to automate tasks and services in a way that enables a vast number of users to expect the same quality service for a low price.

Consider a CRM platform, like HubSpot. It has more than 120,000 users, who in turn can have hundreds or thousands of leads, prospects, clients, or customers of their own. That’s countless emails that need to be composed, addressed, sent at the right time, and tracked every day.

HubSpot’s email automation AI gets all of this done effortlessly. 

Source: HubSpot

That’s part of the reason why SaaS companies can exhibit such massive growth. A lot of work can be automated, meaning staffing costs are kept low, and there’s virtually no limit to how many customers can be served at once.

At the same time, the growth of the cloud computing industry brings SaaS companies more computing power and more cloud storage at faster delivery rates. 

Source: Grand View Research

That means SaaS operators will be able to automate even more complex tasks at a lower cost in the future.

Truly, the future of the SaaS industry lies in AI and its ability to automate workflows. Therefore, to beat your competition and rise to the top, it’s definitely a good idea to get to know AI systems and see how much of your workload can be automated as well.

Machine Learning

Building on our first point, machine learning (ML) is a subset of AI that’s gaining momentum at breakneck speeds, with its market value approaching $117 billion.

ML is a fascinating field, arguably even more so than AI. 

While AI automates massive amounts of work, unlocking incredible growth opportunities for SaaS companies, ML can actually predict events and outcomes by analyzing great amounts of data, building models, and testing them.

Source: SAP insights

By repeating tests and trying out different models, the effect of “learning” is achieved, meaning that these systems get more efficient over time.

This has considerable applications in SaaS business. Machine learning enables systems to learn from each task and build upon the experience next time. 

It also helps discover patterns in users and connect them to the optimal solution, giving every customer a tailored service when using the software.

For example, Netflix’s recommendation system is a simple example of machine learning. The more content you watch, the better the streaming service becomes at recommending content for the user to watch next.

Source: Netflix

In a world saturated with video content, the streaming service that does the best job capturing its users’ tastes is sure to come up on top.

And that’s just the tip of the iceberg. Machine learning, just like the entire AI sector, will continue to grow. Consequently, it’s going to be able to come up with better models, completing tasks with incredible accuracy as time goes on.

Centralized Analytics

The SaaS industry has always been driven by data. SaaS products lend themselves to close analysis. Founders are able to track how customers are using their products, as well as how successful they are in completing tasks and solving problems.

From the very beginning, SaaS companies have used data to guide their growth and development so that they can deliver the best possible solutions to satisfy their customers.

In 2021, there is more data coming in from users than ever before, and the number of solutions designed to analyze and organize that data is soaring. 

For example, in 2020, there were 1,258 software solutions for data analysis in marketing alone. They represent the blue cluster in the image below.

Source: chiefmartec

Naturally, a need emerged to centralize all of this information and allow every member of the organization to access and understand that data. 

After all, data can only be understood in context, and different experts can draw different conclusions from the same data set. Therefore, to really drive development using data, companies need a central system the entire team can use to make decisions.

That’s why data serving platforms, like our own solution, Trevor.io, are in high demand in 2021. 

Source: Trevor.io

Trevor.io enables your entire team to access every bit of data you’re collecting in real-time. Just plug in your data source and dive in to learn, share, and make well-informed, data-driven decisions.

In the modern-day software business, the amount of data coming in can quickly get overwhelming. This is especially true if you use multiple solutions which can sometimes conflict with each other. 

So, to avoid drowning in a sea of information, see what you can do to centralize and consolidate your data.

Vertical SaaS

In today’s world of business, founders and CEOs are getting more and more tech-savvy and open to using SaaS products to handle an increasing number of tasks. 

This can create a lot of confusion because different teams within the company can be using different SaaS solutions for their day-to-day processes. 

Source: Blissfully

There’s a product for your accounting needs, for payroll, and, of course, CRM. Then, you’ll need a couple of apps for communication and collaboration, as well as a whole suite for email, task scheduling, and so on.

Of course, SaaS products cost money, so, on top of being potentially inefficient, using multiple expensive products isn’t always financially sustainable.

To bring some order into this chaos, SaaS companies have started to offer vertical solutions, instead of thinking horizontally.

This means that, rather than offering something like a CRM solution that can be applied to almost any type of business, these companies offer a combination of solutions created specifically for a single industry. 

Vertical SaaS companies can, therefore, offer unique, industry-specific solutions for, e.g., the restaurant industry, healthcare, or legal services.

For example, the Fourth platform is a complete solution for restaurant management. 

It features inventory control, personnel management, payroll services, training and development, and analytics, all rolled up into one product.

Source: Fourth

With vertical SaaS, you no longer have to be a jack of all trades and have a working knowledge of every product your company uses. Instead, you can concentrate on becoming a master of one complete solution that’s used by everyone in your company.

White Label SaaS

Since companies across the board are becoming more tech-conscious, it comes as no surprise that many of them want to carry out their work using their own software, one that reflects their brand and their industry.

There are essentially two ways you can go about doing this. The first option is to hire a development team or outsource the job to a development agency.

The result would be a completely customized, on-brand piece of software. However, the drawback is that it would come at a very steep cost.

The other option is white labeling. This is when a company buys a piece of software created by a SaaS company that was repackaged and customized by a reseller to look native to the buyer company.

Source: Trevor.io

The second option is, of course, much more cost-effective, and therefore favored by an increasing number of businesses.

In fact, as many as 77% of buyers said they prefer software that features customization and branding options.

So, what does this mean for SaaS providers? It means that there is a burgeoning market for SaaS products that can be adapted to the needs of the clients and their brands.

For example, ActiveCampaign is marketing automation and CRM platform. Their enterprise plan offers all the functionalities of a platform with white labeling functions such as:

  • Custom domains
  • Logo rebranding
  • HTML/CSS rebranding
  • Adding and removing buttons and functions
  • Removing all references to ActiveCampaign

They offer this plan mainly to agencies that further provide marketing and CRM services to end-customers. 

Source: ActiveCampaign

The screenshot above is an example of how the ActiveCampaign interface can be rebranded while retaining its core functions.

The main takeaway here is that customization capabilities are very much en vogue. So, even if you don’t plan to operate a white labeling company, it might be a good idea to allow for some level of personalization with your product.

Micro-SaaS

As you may have noticed by now, the running theme of this article is that the SaaS landscape has become quite crowded in recent times. 

That’s why more and more founders are looking for ever narrower, niche solutions to be able to offer something unique that the market hasn’t seen yet.

These niche solutions are called micro-SaaS and they usually come in the form of single-feature software, plugins, or extensions.

Let’s take a look at some examples to clarify. 

Tweetpop is a micro-SaaS product that plugs into your Twitter and lets you create, schedule, and manage your tweets.

Source: Tweetpop

Another example is JustRedirect, a tool that lets you migrate sites to new domains and manage redirections.

Source: JustRedirect

As you can see, these products often “piggyback” on existing structures, which means they’re very easy to build and manage. 

They’re usually run by only one person or a very small team, which means they can be founded at a low cost and in a short time. 

Still, the most successful of these products pull in a solid MRR ($2K for Tweetpop and $5K for JustRedirect).

For all of these reasons, we can definitely expect to see some major expansion in the micro-SaaS market in the coming years.

Low-Code SaaS

The last item on our list is a great example of how building software is slowly decoupling from coding as the industry evolves.

Low-code SaaS solutions enable users to build their own software without requiring extensive knowledge of coding. 

Instead, these platforms rely on visual interfaces, dropdown menus, and drag-and-drop functions to create complete, functioning applications and software products. 

Source: Peaceful Evolution

Above, you can see how OutSystems, a low-code application development platform, approaches building software. You can create customer flows and then select functions from a menu, which drag and drop into the flow.

While these platforms don’t offer complete customization like you would receive hiring a development team or agency, they do allow you to save a significant amount of resources. 

Furthermore, low-code platforms also allow you to finish a project much faster and deliver a complete solution in less time.

And we’re talking major time-to-completion reductions here. 

The low-code platform Linx did an experiment where they asked two developers to create an application to contact a forex API, find out the current rate exchange and email the information back to the client at a scheduled time every week.

Source: Linx

Developing the app in the traditional way took more than seven hours while working on the Linx platform took only 16 minutes.

In the fast-paced world of software development, it’s easy to see how this approach to coding might soon become an everyday occurrence.

Conclusion

Hopefully, this article has provided you with some great ideas on how to modernize your SaaS product or build a new piece of software that will stay ahead of the competition.

Your next step is to dive deeper and learn more about the cutting-edge trends we’ve outlined in this list and see how they could help you serve your customers better and grow your business to success.

Remember, the only way to survive in the fast-changing world of SaaS is to adapt and evolve. Thankfully, software development is a flexible field, and it boasts a customer base unafraid to try new things. So don’t be scared to experiment and test new technology to stay relevant.