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SaaS: Vertical-Specific Software is Largest SaaS Segment
Global Software as a Service market is expected to reach $55 billion by 2026 from $12 billion in 2016, according to a report by Better Buys. Currently about two-thirds of small and medium businesses have started to use SaaS services and that is expected to grow to 78 percent over the next three years.
Small companies are particularly attracted to SaaS options that are very specific to their industry, rather than broader ‘platform’ offerings from vendors like Salesforce. Vertical-specific software is now the largest segment of the SaaS market.
Stacia Mullaney of Better Buys, said that “SaaS solutions offer significant benefits over on-premise products including cost, accessibility and scalability. SaaS contracts are frequently month-to-month so customers aren’t locked into long-term deals. This means vendors must continually deliver value to minimise flight risk. The surge in startups has taken a large volume of market share from major competitors like Adobe, Cisco, IBM, and even Salesforce. New SaaS offerings and startups are rising at a rate of more than 1,400 over the last five years among various sectors. Larger organisations like Salesforce will need to learn to pivot and execute faster to keep up. Companies are beginning to look for software that answers needs more specific to an industry rather than utilizing enterprise level SaaS that offer a more ‘platform’ approach, like Salesforce. With this shift, SaaS companies are seeing interesting changes in the marketplace.”
From SaaS report by Better Buys.
