How the Cloud Has Affected the SaaS Industry

The Software-as-a-Service (SaaS) model took off in the mid-2000s, thanks in large part to the rise of cloud computing. Since then, businesses in countless industries have added SaaS products to their core offerings. Some organizations exist entirely as SaaS companies and deliver services to customers all over the world.

What’s more, the SaaS sector isn’t going anywhere anytime soon. End users love being able to access high-quality software products on demand. According to one Research and Markets report, the global SaaS market will exceed $370B in value by 2030. This growth assumes a 15.6% CAGR beginning in 2022.

• So what exactly is driving this growth?
• How will the SaaS industry evolve over the next 5-10 years?

We answer these questions and more below.

What’s on the Horizon in the SaaS Industry?

One trend that is both disrupting and enhancing the SaaS industry is the increasing commercialization of artificial intelligence (AI) / machine learning (ML) capabilities. With AI/ML, SaaS companies are already personalizing products to the needs of unique customers. Looking ahead, AI/ML will make this even easier.

SaaS companies will be able to process even more information about their end users and create automated processes that lead to custom user experiences. All of this will happen quickly, from new product deployments to ongoing updates.

What’s more, leveraging SaaS products will become more intuitive with the advancement of chatbots, AutoGPTs, and the underlying natural language processing technology. Customers will be able to ask questions and hand off tasks to these tools, which will expand the value of SaaS offerings. Customers won’t have to spend as much time dealing with human customer service representatives or account managers to get what they want from their products.

SaaS products will also become more secure with AI/ML capabilities. Companies that sell SaaS products will be able to detect fraud and recognize patterns of malicious behavior across millions of users. They’ll be able to set up triggers that warn of potential risks and keep cybersecurity threats from spreading to other users.

We’ll also see more low-code / no-code SaaS products that empower customers to build their own solutions on someone else’s infrastructure. As a result, we’ll see more SaaS companies morph into Platform-as-a-Service (PaaS) organizations that hand the keys over to their customers. And as companies look to create value with fewer resources, such PaaS offerings will become more attractive.

On a related note, we’ll see more SaaS products in the form of Data-as-a-Service (DaaS) offerings as well. In the age of big data, it sometimes makes more sense to let someone else deal with the collection, storage, processing, and analysis of massive datasets. DaaS customers will be able to focus solely on decision-making rather than on how to deal with their data effectively. Additionally, we’ll see more AI-powered co-pilots emerge onto the scene that helps people make smart decisions based on their data.

To summarize, the SaaS industry is evolving rapidly, and SaaS companies are upgrading their capabilities with cloud-enabled AI/ML. Some will give end users more control over their offerings. Others will grow into new areas and sell more comprehensive services.

How ClearScale Supports SaaS Organizations

ClearScale has helped SaaS companies on a wide range of cloud projects for over a decade. We’ve earned the AWS SaaS Competency, demonstrating our ability to generate tangible results for clients in the real world.

For example, we worked with one company that offers an AI/ML-powered platform for managing digital commerce experiences. Our client wanted to modernize and optimize certain aspects of its cloud environment. We helped the in-house team prioritize areas of improvement and make key updates according to AWS’ Well-Architected framework. Everything that we did reduced our client’s cloud expenditures by 25%.

In another engagement, we worked with a computer vision software company to deploy new SaaS architecture on top of a video processing engine. Our team refactored the existing storage layer and transitioned the client from Amazon EBS to Amazon S3. We also migrated the company’s database to Aurora PostgreSQL and implemented auto-scaling with Amazon EC2. As a result of our efforts, our client was able to expand access to its differentiated video processing engine.

We’ve also executed complex migrations, including one for a business that sells a popular SaaS product for managing fitness centers. Our client wanted to migrate and modernize its legacy IT, which included adopting Amazon Aurora on the database side. ClearScale engineers led the way in helping the company build a cloud-first culture and create a migration plan. Following the engagement, the client had everything needed to execute the migration successfully.

These types of projects and more are well within our AWS SaaS application development wheelhouse. To learn more about how ClearScale can help you on your next SaaS project, download the eBook.

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