What does the future hold for SaaS?
Our second lecture focused on the subject of big data: we discussed was big data, and inside of it we discussed the new trend of ‘X as a Service’, with X referring to one of either Platform, Infrastructure or Software.
In this article I would like to discuss the growth of SaaS from its beginnings to what it is now and speculate upon how this technology will be developed in the future.
First, let’s take a look at the early history of SaaS. Some experts say that it all started in the 1960s at IBM. As we now know, in those times computers had considerably less power and were physically much bigger compared to what is available today. Not only that, but the price was also significantly different: companies would have to pay almost $200,000 for a gigabyte of hard drive space. If a company wanted to purchase a computer, it would go for $9 million, plus the company would have to hire a staff of 60 people to keep it running. That is when time-sharing came out, a significant more economic viable solution. Allowing businesses to rent processing power and space instead of purchasing a computer. (https://www.process.st/history-of-saas/)
Since then, computers have changed dramatically, not only with regards to their power and price, but also the ways in which we use them. A recently emerging application of SaaS is to provide a service where users pay to use a software that is hosted in a remote computer. In the past years this has become the preferred business model for tech companies, as it allows clients to pay a monthly fee with a subscription model. On the other hand, users benefit from a painless access: they do not need to purchase any extra hardware. Basically they just need internet connection.
We can identify the advantages of this business model that make it the preferred one. From the user perspective, SaaS usually are designed with a easy and fast integration. As well, SaaS allows the client to decide the subscription model they want to start with and upgrade if necessary; many often offer a free trial period.
We have come a long way from the 1960s; what is next? Taking into account the development of technology making it an extremely dynamic market, it is not an easy answer.
There are some trends that are indicative of the near future of SaaS.
Year after year there has been a strong transition from web apps to mobile apps. Many of the successful SaaS companies are what we call ‘mobile first’, meaning that they have chosen to develop their software for mobile devices before offering services for the web. Besides games and messaging, a smartphone can host a variety of apps that allow the user to use their company chat, pay back a friend, order a taxi, or even send email marketing to their customers.
Artificial intelligence, with machine learning in particular, has become one of the biggest asset for SaaS companies in the last years. Developing this technology allows them to create new levels of automation that leads to efficiency and accuracy in their software, providing a competitive advantage that could differentiate them from their competitors.
What do you think? Is this the future for SaaS? What other trends can you identify?