Did you know that SaaS revenues have increased by 500% in the last seven years? That makes it a safe bet to say that software as a service (SaaS) has become a mainstream technology.

SaaS has become the new development standard because the cloud has dramatically reduced the costs of developing and distributing software while also increasing user accessibility.

Recent observations find three exciting developments in SaaS that are making life easier for both customers and developers of business-to-business (B2B) software.

Focusing SaaS Solutions on the End User

The costs to develop and distribute cloud-based software have dropped significantly over the years, and that low cost is allowing startups to build niche solutions for customers. Once upon a time, there was a gap in software solutions for midsize companies, companies that generate income of $50 million to $1 billion in annual revenue. You could choose between accounting software designed for small businesses (such as QuickBooks), or you could level up to a big, expensive ERP solution like SAP. No solutions were “just right” for the midsize company.

Unfortunately, the problem was compounded by legacy software leaving little room for flexibility because of its rigid structure. If you needed to replace a module or part of the software, you had to basically throw out the software and begin over. The majority of midsize companies stuck in between enterprise or small business solutions were forced to implement these custom tools at a premium price in both money and time.

Thanks to SaaS, we now have flexible solutions for companies in the middle. These SaaS solutions integrate with a variety of B2B software applications for all sorts of business needs and offer the flexibility and scalability midsize companies need.

Best of Breed Vs. All in One

Most companies prefer investing in “Best of Breed” applications that are really good at one thing and meet a specific need rather than spending money on “all in one product” that does a little of everything but nothing very well. This approach will be good for developers who focus on producing specialized application solutions. Analysts are betting that there will be a strengthening focus on SaaS apps seamlessly integrating with the tools teams are currently using.

Some companies implement a cloud ERP system and then utilize specialized software that integrates with their ERP via pre-built API connectors. This kind of approach is seeing increased growth and adoption.

Developer Focus on Service and Support

SaaS companies are emphasizing service because the subscription contract model makes opting out easier when the contract term ends. This model makes it crucial to have a great product that delivers value and a great support system so that customers don’t have a negative experience if you want to retain and grow your customer base.

The ability to convert into a subscription guarantees future income and delivers greater value to the customer. All of this is transforming software companies. These companies are looking more and more like service businesses, and that’s great for end users. This transformation also means companies will invest more money and resources into customer success.

Like Amazon, SaaS companies need to have an “obsessive-compulsive focus on the customer as opposed to obsession over the competitor.”

Understanding how your customer thinks is the best way to provide high-quality service that exceeds all expectations. SaaS providers are growing smarter. They are hiring team members with people that think like their customers. Employing those evangelists that work in the trenches as part of the team is a wise investment. As the working knowledge of software and pain points evolve, those who have worked in the trenches will bring an important perspective and valuable user experience to the table to develop better solutions and customer care.

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Jul 22 22
Christina Zumwalt
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