Future of SaaS: What to Expect in Coming Years

What will happen to SaaS as a result of the extraordinary effect on many businesses? Is there a bright future for SaaS firms?

During the past two decades, SaaS has dominated the technical world. And now, the pandemic era has left an indelible mark.

The cloud-based software-as-a-service (SaaS) model is a game-changer for businesses.

However, SaaS isn’t going anywhere anytime soon.

The evolution of SaaS is shaped by changes. SaaS must have a lot in store now that it has a name and a reputation. If you’re interested in SaaS, understanding what’s coming up can help with your preparedness.

Prepare yourself for the future by learning about upcoming trends. Let’s get started.

SaaS: A Brief Introduction

Software-as-a-Service (SaaS) is a cloud-based technology that allows customers to access and use software through the internet.

On the user side, SaaS provides a lot of advantages. It’s cost-effective and accessible from afar. In any case, how does the provider feel about it?

Yes, without a doubt.

SaaS products are often charged on a monthly subscription basis.

As a result, as a SaaS provider, you will have consistent revenue. Your client base is satisfied, and you have a good reputation.

In addition, as compared to traditional methods, developing and maintaining a SaaS product is less expensive. You can also simply improve and develop your items as time goes on.

An Overview of The Evolution of SaaS

The term “software as a service” (SaaS) has been around for almost 60 years.

When computers first came out in the 1960s, they were huge and expensive. IBM and a few other mainframe suppliers recognized this problem and developed the notion of “rented computers.”

The computational power and storage capacity were housed on the mainframe. The numerous “dumb terminals” allowed multiple people to access and operate them. Small businesses that couldn’t afford costly computers benefited greatly from this technology.

This technology, sometimes known as ‘time-sharing’ or ‘utility computing,’ was the first SaaS model.

The computer-rental scheme lasted into the 1990s. The 1990s saw the introduction of low-cost computers. Computers became affordable to a large number of individuals. As a result, “rented computers” were no longer needed.

But the SaaS notion didn’t end with that.

LAN set out to grow the online community. ASPs (Application Service Providers) arose as a result. The notion of centralized computers was promoted by ASPs. ASPs hosted and managed the service created by third-party providers, over the internet.

The idea for SaaS came from ASP. However, SaaS firms varied from ASPs in that they created their own product. ASPs failed because of several problems and inefficiencies. SaaS is still going strong.

Salesforce’s development paralleled that of SaaS after the 2000s. Salesforce was one of the earliest SaaS firms. It offered CRM-based services that were entirely web-based.

Salesforce used ‘End of Software’ ads in the early years to help consumers understand the benefits of the cloud.

Salesforce began to expand effectively by attracting customers to cloud-based services and educating them about the numerous benefits.

People began using cloud services because of firms like Salesforce and a few others that were early SaaS providers. People began to understand the primary advantages of SaaS as a result of this exposure, and they began to migrate to it.

SaaS has been gradually growing with the arrival of Google, Hubspot, Amazon, and a slew of other SaaS pioneers.

SaaS in the Year 2021

By 2021, SaaS will have extended its branches over a wide range of industries. Some of the branches are well-established, while others are young and developing. A brief overview of the various sectors in which SaaS operates.

There are 11,000 SaaS firms in the world, according to Virayo. This is supported by yet another report from Blissfully.

  • 102 SaaS apps are used on average by companies with 1 to 100 workers.
  • 185 SaaS apps are used on average by companies with 101 to 1,000 workers
  • There is an average of 288 SaaS apps used by companies with 1,000 or more workers.

The world of SaaS is always changing. Naturally, the SaaS industry is highly competitive. Is there a way to make your product/company stand out from the noise?

Keeping an eye on these trends and implementing them into your product ideas and objectives will assist you in doing this.

The Future of SaaS

80% of businesses, according to 99 Firms, currently utilize one SaaS product. In the period 2015-2017, the number of SaaS apps utilized more than doubled. By the end of 2021, 73 percent of businesses have stated that all of their apps would be SaaS.

For the years 2020 to 2027, the CAGR is expected to be 18.2%. An estimated 151.1 billion US dollars would be generated by SaaS worldwide by 2022.

The question is, where will SaaS thrive? Trends exist to inform you of this. Let’s start by looking at some of the current trends.

A Look at Current Technological Trends

Artificial Intelligence (AI) and Machine Learning (ML)

In the SaaS industry, Artificial Intelligence and Machine Learning are projected to bring about a slew of developments that will make SaaS an even more sought-after technology.


An automatic response system in SaaS may be developed using Machine Learning technology.

In its CRM services, Salesforce, one of the earliest SaaS firms, has automated a number of processes.

Look at ‘activity and alerts’ as an example of automation. This tool allows you to track customer-related actions and receive notifications as necessary. As a result, you will be more committed to your consumers.

Chatbots may also be used to start a conversation. A timely and individualized connection with consumers is ensured by this kind of communication.

The benefits of automation are numerous, and it will continue to be a trend-setter in the future.


It is no longer a luxury, but rather an expectation that personalization will be available in the future. Customers like customization in everything they get, from the messages they receive to the services they choose.

Spotify is a music-streaming service that relies on the cloud to provide music. Machine learning allows SaaS to give its users customized playlists.

And, in the future years, the need for customization will only rise. As a result of personalization, customers are more likely to be engaged and receive better service.

The data processing capabilities of AI will make customization a breeze!

Analytical Prediction

If I had known that sooner… how many times have you thought that?

With predictive analysis, you can finally save that business conversation.

Predictive analysis can tell you everything from which of your website visitors is likely to become a customer to which dissatisfied customer is going to unsubscribe.

Using AI-based data and predictive analysis, among other trends, will undoubtedly be a goldmine!


The use of SaaS is growing. There are 73% of companies that have at least one application on the cloud, according to IDG’s Cloud Computing Survey 2018.

API allows two or more programs to be integrated. Your customer’s systems and software will already be in place. They also want the new software they buy to be simple to integrate with current applications.

As a result, in the SaaS industry, connectivity is highly desired.

For example, Cloud Elements states that the software with an easy integration facility has:

  • Reduction of 60% in customer churn
  • Customer Lifetime Value increased by 15%

Enabling API integration for your SaaS solutions makes sense for a variety of reasons.

Virtual and Augmented Reality

The reality is, we all have a soft spot for fictional characters and stories.

Visualizing an imagined world is possible with virtual reality, whereas augmented reality adds fictional aspects to real-life surroundings. For a human intellect, both are thrilling.

Education, healthcare, military training, manufacturing, and navigation are just a few of the sectors where VR and AR may be employed in SaaS.

Currently, Ford Motors personnel are utilizing virtual reality software to create new automobiles.

According to Smith, one of the Ford Design managers, creating a new car design using the software only took 40 hours. Compared to traditional software, this is a lot less time.

As a result of this development, SaaS lovers have a wide range of options to study.


SaaS relies on centralized databases for its functionality. Attacks on data stored in centralized cloud databases are possible. This is one of SaaS’s biggest flaws.

Blockchain technology is an example of a distributed system. New data records are constantly verified by blockchain technology. When new entries are uploaded, the system also creates a duplicate of the whole blockchain. As a result, there is no risk of data loss.

As a result, data insecurity is no longer a problem.

A Mobile-First Strategy

Aren’t you tired of opening a laptop when you have a smartphone that’s only a swipe away?

People want access to information that is simple. The best way to gratify them is to take a mobile-first strategy. Mobile phones are also useful.

The GSMA estimates that there are 5.20 billion unique mobile users worldwide.

  • According to a Google survey, 57% of consumers do not recommend firms with bad mobile websites.
  • In addition, the survey reveals that 40 percent of mobile users will switch to a competitor’s website once a terrible mobile experience is encountered.

In addition, as compared to mobile, desktop online usage has been quite low.

Make sure that your product is mobile-friendly in the future.

Trends in Type

Vertical SaaS

The vertical kind of SaaS is expected to increase in the future, as opposed to the horizontal type.

While horizontal SaaS covers a large market, vertical SaaS targets a specific specialty. HotSchedules is a good illustration of this.

As the name suggests, HotSchedules is a restaurant scheduling software. You’ll be able to better manage your restaurant’s workforce, inventory, finances, and talent.

Vertical SaaS businesses specialize in a certain industry. In this way, they are able to deliver services that are unique to each user.

On-demand customization is available. Vertical-SaaS products are expected to grow in popularity in the future years.


The greatest happiness is found in the tiniest of things.

Micro-SaaS is likewise aimed at a specific market. Usually, it’s run by a single individual or a small group of people. Micro-SaaS solutions are designed to alleviate a customer’s frustration with utilizing a product. It’s also possible that they’re just add-ons to current SaaS solutions.

In order to be successful, micro-SaaS products must be designed with the goal of alleviating customers’ pain points/problems.

Take Grammarly for example. Almost every email recipient feels compelled to proofread the message. A simple grammatical error in an email can create humiliation for the sender and disappointment for the recipient. Grammarly recognized this and developed a solution.

Wherever text correction is needed, Grammarly may be utilized as an add-on/plugin. It now has over 10 million Daily Active Users.

Every product that people use is in search of excellence and a better user experience. In the future, the number of micro-SaaS companies will increase.

Other Developments

Product-Driven Development

Customer acquisition, expansion, and retention are all handled by the product itself under the Product Led Growth strategy. Your product, in a nutshell, is your ultimate salesman.

Customers are unwilling to believe. They’re curious.

A positive user experience and positive word-of-mouth from a pleased client can help you gain new customers. Isn’t it incredible? A few businesses have already demonstrated this. Slack is a good example.

Slack launched in 2014 without a sales team. And the first six months of growth were entirely based on word-of-mouth referrals.

A friend’s advice is always preferable to the salesperson’s, right? That is how PLG operates.

Furthermore, we are aware that purchasers are changing. It’s the era of the end-user. People will only make a purchase if they are satisfied with the items.

It’s a great moment to think about implementing a PLG strategy for your company.

COVID-19 and The SaaS Market

Do you believe firms would have made it through COVID-19 if SaaS products had not been available? Certainly not! SaaS solutions like Zoom and Google Meet have even made virtual meetings feasible.

The SaaS market share is anticipated to reach $157 billion by 2020, according to Aithority.

The rise of digitalization has been aided by remote working. COVID-19 times is an indication of how fast the SaaS company has grown.

Market for SaaS After Covid

Remote access and cloud services are becoming increasingly important to businesses. This makes SaaS goods available on demand. The worldwide SaaS industry is expected to reach US$68.2 billion by 2020, according to PR Newswire. The estimate has been updated to US$219.5 billion by 2027, after COVID.

People are in a crisis, despite the fact that SaaS is growing.

Companies should also change their attention from recruiting new consumers to retaining existing customers in light of the current economic situation. By making some modifications to your subscription model, you may increase retention.

  • Provide a free trial.
  • By temporarily suspending memberships.
  • By providing exclusive deals.

SaaS firms should adapt their approach to responding to both evolving customer requirements and the economic situation.


The threat to data security is one of the primary drawbacks of SaaS. However, the blockchain movement suggests that it may be possible to do so as well.

During the COVID era, the SaaS company has proven to be crisis-resistant. The patterns suggest that the SaaS industry has a lot of potentials.

It will be simple to keep up with quickly changing user behavior and demands because SaaS is also where most AI and ML advancements are taking place.

Understanding users will be a breeze with AI’s data processing and handling skills.

If you don’t pursue SaaS, you’re effectively setting yourself up to lose money.

Without a doubt, SaaS has a bright future!

Stay Connected!

Let's Build Your App

Book your FREE call with our technical consultant now.

Let's Schedule A Meeting

Totally enjoyed working with Karan and his team on this project. They brought my project to life from just an idea. Already working with them on a second app development project.

They come highly recommended by me.

Owner, Digital Babies

This is the best job I’ve hired Aelius Venture for. The team does quality work and highly recommends them and their capable team.

Owner, Digital Babies

We appreciate the help from Aelius Venture’s team with regards to our React Native project.

Oh D
Owner, Startup

Are you looking for A SaaS Developer?

This website uses cookies and asks your personal data to enhance your browsing experience.