The famous software licensing and delivery model SaaS or ‘Software as a Service’ has turned out to be the most feasible options for businesses when it comes to subscription-based, licensed software solutions and data analytics tools.

Organizations all around the globe rely on SaaS because of its versatility and accessibility. Therefore it is widely accepted in the cloud computing market. This software distribution model is cost-friendly, effective, and agile, proving to be a reliable option for all types of businesses.

The market for SaaS is going to expand exponentially in 2021 and even more in the future years. Let’s look into the statistics provided by Bloomberg. We can see that public cloud platforms, applications, and software services such as SaaS are expected to grow at a CAGR of 9% (Compound Annual Growth Rate) in the 2019-23 period and will be worth $60.36 billion.

Young and influential businesses worldwide are looking for innovative tools and technologies that can boost their efficiency and productivity. They are putting their time, money, and trust on these SaaS platforms.

With the current trends and developments, we can say that Software as Service platforms will continue to be robust and reliable industry tools as they strengthen their foundation.

The present scenario for SaaS indicates some exciting trends in the SaaS industry that one should keep an eye on. Let’s list down these top 5 SaaS industry trends one by one so that we know what the future holds for us.

1. Artificial Intelligence

AI or “Artificial Intelligence” has created a massive buzz in the tech industry. The technology is prevalent and has managed to spread across a wider audience such that the expected size of the global artificial intelligence market is estimated to reach $390.9 billion by the year 2025.

It is used by businesses because it helps them resolve an array of business problems, provides an automated mechanism for repetitive tasks, ensures security, increases workflow efficiency, desktops, and boosts human creativity.

The AI algorithm also provides a scope for anomaly detection, machine learning, pattern recognition and can deliver essential data alerts. These data alerts can gather information from recent trends and provide those updates to you.

In this way, it gives you secured control over your business as you get access to all notifications in a situation when some unforeseen problems or updates arise.

So what will be the impact of AI on SaaS in 2021?

  1. Automation – As we had discussed earlier, AI provides a significant area of activity for machine learning. It can be used with SaaS to automate tasks like customer chat or live bots for chat, customer care reports, applications, onboarding processes, etc.
  2. Security – AI machine learning has pattern recognizing capabilities that can be utilized in enhancing SaaS security. It can provide instant identification, theft protection, and quick built-in recovery.
  3. Speed – AI combined with SaaS can boost the speed of your internal processes and other operations. This allows businesses to make quick decisions, get early forecasts and increases overall responsiveness.
  4. Personalization – When software or applications use NLP, also known as natural language processing, we know that they’ll provide voice control mechanisms. Such voice control features can be used in customer services to improve personalization and better understand client needs.

2. Increase In The Demand For API Connections

API or Application Programming Interface has been a very crucial segment of software development. As the popularity of SaaS increased in the market, existing businesses found the need to integrate it into their business models.

Some wanted data migration from their existing infrastructure to the cloud, but the rest wanted to incorporate it with the existing infrastructure. Initially, SaaS didn’t provide an integration solution. As a result, customers weren’t satisfied. 

They had to redirect their clients to a third party to provide a particular API to incorporate the cloud solutions with their existing infrastructure.

SaaS developers didn’t focus on reinventing the whole mechanism; instead, they focused on their core functionalities.

3. Migration To PaaS & MicroSaaS

Migration To PaaS – Let’s first discuss migration to PaaS. We expect SaaS to migrate towards the sphere of PaaS or ‘Platform As A Service.’ 

We expect developments for businesses that can develop custom apps as add-ons.

We have recently seen many software companies releasing PaaS-centric services to acquire a more significant market share in their business niche. As per the current trends, we expect the same with SaaS; we expect it to become more pervasive this year.

As per this trend, there are three significant benefits of using PaaS development. Better features, functionality, and customization are the three major advantages. These benefits can boost your business agility and provide you the creative liberty to re-innovate.

PaaS services are very robust, vigorous, flexible, and approachable, allowing you to scale your business easily. The PaaS model also provides security measures because these developments require automated updates.

Micro-SaaS – Let’s define what Micro-SaaS is. When a SaaS business targets a specific market and is operated by a single individual or a small team, at low costs, and has a small yet dedicated customer base, with no external funding, we call that SaaS business a micro-SaaS.

From 2021 onwards, SaaS companies will have to discover and develop new strategies to innovate, offer services, and reach new prospects. In such a cutthroat business environment, we assume more micro-SaaS developments to emerge out this year. Such nice specific SaaS offerings can prove out to be very beneficial for businesses in 2021. We can expect a more significant number of micro-SaaS innovations this year.

4. Vertical SaaS

We know that Horizontal SaaS is more client and industry-oriented. On the other hand, vertical SaaS is fully customizable; it can be used to target particular clients of a specific niche or industry. For instance, healthcare analytics software, logistics, etc.

Why will Vertical SaaS have a crucial impact on SaaS trends in 2021? Vertical SaaS can easily incorporate or implement changes as per clients’ requirements or industry demands.

This provides more possibilities for businesses to reduce customer acquisition costs, increase chances of upselling, and more flexibility. Let’s see all these benefits one by one.

  1. Specific Customer Insights – Vertical SaaS provides customer intelligence, allowing businesses to get particular customer insights from a particular industry. Focused information and insights play a critical role in delivering more customers.
  2. KPIs And Metrics – Vertical SaaS comes with pre-defined KPIs and metrics; businesses can utilize these analytics to assess their productivity and performance.
  3. More Transparency – Vertical SaaS provides better data governance that offers more transparency.
  4. Higher Quality Of Services – 2021 is expected to witness a higher quality of services from vertical SaaS providers. Everyone will try to stand apart from the crowd and aim to deliver distinct services.

5. The Mobile Driven Mindset

The fifth component that can affect the SaaS industry trends revolves around smartphones. As per the recent studies, it is expected to see massive growth in the proportion of smartphone users, an estimation of 72.6% of the total population will surf the internet using their smartphones.

This is a mobile-driven age; people can reach out to anyone in any part of the world and remain productive throughout the year. We are heading towards a ‘compact and portable’ digital age; therefore, it is expected that the mobile-driven age will decide the fate of SaaS in the future.

Even businesses across the globe operate a lot of things from their smartphones or tablets. Mobile dashboards make operations and tasks easier for employees. The software services will have a mobile-driven mindset this year, and they’ll offer more prominent, reliable, and robust mobile features in the year 2021.

Therefore, a mobile-driven approach will be the most critical SaaS industry trend for the year ahead. We all can expect a hike in the number of mobile-based platforms for companies this year.


SaaS industry trends have no intent to slow down and show no signs of compromising their innovative solutions in 2021. AI-based SaaS, Micro-SaaS, Vertical SaaS, Migration to PaaS, Increase in demand for API connections, and a Mobile-driven approach is likely to decide the future consequences of SaaS.

Our demand for more and more reliable and vigorous software solutions is increasing each day in the digital age. We are yet to see a massive digital transformation. A large number of companies and businesses are now migrating towards cloud-based solutions. Therefore, the potential for enhancing these software offerings and other services is enormous.

In this digital atmosphere, data is like oxygen. It is a driving force for intelligent and influential businesses. SaaS services will become more approachable, easy-to-use, versatile, and affordable in the coming years. With these top 5 trends that are aligned with the future developments of SaaS, Cloud-based solutions and services will provide more effective technological benefits to your business.

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