There’s a big shift going on in the technology world.
And although it’s a bigger impact on corporations, it can be seen on the consumer level.
Once upon a time, you could walk into Best Buy and peruse the aisles of software. You could pick up a copy of your favorite Microsoft or Adobe product. You’d install it on your computer and keep the disc somewhere safe just in case you had to reinstall it at some point.
You’d keep that copy until you decided to update, and over time you’d have built up a nice collection of discs over the years.
Now hardly any computer even comes with a CD drive. There’s no need for all those steps anymore.
Even the giants of Microsoft and Adobe have switched to the SaaS business model. Software as a service has brought a new way to how we buy and upkeep our software. You’re responsible for the initial download. Then the company charges your credit card monthly or yearly and updates the software as needed.
Yes, SaaS has made it simpler for the everyday computer user, but that’s not where the real money is.
Companies are switching to SaaS because it makes life easier for their programmers and employees. The initial costs of cloud-based setup are typically much lower. Updates can be done quickly and timely. And security can be integrated into the setup easily.
Gartner predicts that the SaaS industry will be worth $143.7 billion by 2022. It’s all about agility and cost-effectiveness. Analysts at Bloomberg predict that cloud platforms and SaaS will grow at 9% compound annual growth rate between 2019 and 2023.
SaaS doesn’t just stand on its own. It goes hand in hand with other trends in tech
Just look at artificial intelligence. When added in, it enables businesses to obtain better value from their data. Analysis can be automated and sped up. There is the possibility of more information in less time.
SaaS Providers Are Finding Their Niche
By targeting specific industries and client types, one can provide complete integration for the companies in that arena. That allows for complete vertical integration for clients. At the end that creates more flexibility for upselling and lowers customer acquisition costs.
And 5G is going to make these services even more in demand.
The truth is that we’re running out of LTE capacity in many cities. Everyone has a tablet and a smartphone. By upgrading to 5G we’ll see the number of devices supported increase greatly. It will also reduce latency issues that have prevented the expansion of more complex AI and remote tasks.
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We already know those will go hand in hand with SaaS.
It’s a trend that is so interwoven with the others that it can’t be ignored. Tech companies now include their number of subscribers in earnings presentations. Because subscribers equal recurring charges which means more money flowing in.
It’s something to brag about and shows that the company is staying relevant to the changing landscape.
I’m putting the finishing touches on my latest WTI issue. It will be sent to subscribers next Tuesday. Inside is a company that’s profiting from big data, and even more so now that it’s streamlined its products with its SaaS model.
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To your prosperity,
Joshua M. Belanger
Executive Publisher & Founder