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The software industry experienced a seismic shift over the last few decades — notably with the explosive growth of software-as-a-service (SaaS) — resulting in significant changes to how businesses purchase and use software applications.
Today, individual employees or teams not only seek out and purchase more software than IT or procurement departments, they even control a larger portion of their organization’s software spend. These profound changes would seem unthinkable 10 years ago, but it goes to show how SaaS continues to disrupt the industry.
Bessemer Venture Partners predicts SaaS will become the dominant form of delivery of all software by the end of the decade, so organizations need to look forward and remain agile when it comes to SaaS, or risk falling behind.
To help you plan for the year ahead and beyond, we mined our insightful data and uncovered five SaaS trends for 2022.
The Top 5 SaaS Trends for 2022
As a leading SaaS Management platform, Zylo holds a unique vantage point into the current state of cloud software, and we have a finger on the pulse of all the latest SaaS trends. In addition to more organizations employing dedicated SaaS managers, we’ll see consumer-focused changes to existing pricing models, SaaS vendors expand to new industries and niche markets, and more.
Read on to learn more about five software trends for 2022 and beyond.
1. Consumption-based SaaS pricing heats up
Recently, more SaaS companies began pivoting away from flat-rate pricing to usage-based models — and for good reason. For SaaS vendors, it creates a win-win scenario by removing barriers to entry, reducing customer churn, and creating a structure for customers to pay more as they find more value. Essentially, the software company grows as their customer grows.
Messaging platform Slack was an early pioneer with its “Fair Billing Policy,” only charging for seats customers actively use. Additionally, SaaS companies including Twilio, Datagod, Snowflake, Courier, Zapier, and Yotpo all serve as examples of organizations that successfully leverage usage-based pricing.
2. Vertical SaaS becomes more important
We’ve already seen massive growth of horizontal SaaS tools, aka SaaS developed for specific areas of the business, such as MarTech, SalesTech, and FinTech. But with this trend, in 2022 we’re seeing SaaS tools are becoming even more granular, serving specific industries like retail, restaurants, and more.
Some examples of popular vertical SaaS solutions include ServiceTitan for the trades, Toast for restaurant management, and Squire for barbershops.
3. MicroSaaS market grows
Similar to vertical SaaS solutions, MicroSaaS tools support an even smaller niche or user base — and often solve only a handful of problems — instead of providing an all-encompassing solution. Unlike major SaaS players, MicroSaaS companies often consist of a couple of employees and lack the high-dollar features like 24/7 customer support or a dedicated service representative.
MicroSaaS solutions often come as add-ons to other SaaS solutions, such as the writing assistant tool, Grammarly, for use in Microsoft Word or Google Docs, and the email productivity tool, Boomerang, for Gmail.
4. Unbundling of SaaS begins
The concept of unbundling SaaS operates on the assumption that not all organizations utilize the same software in the same way. The largest SaaS tools come fully equipped with an exhaustive list of features, yet they may overwhelm smaller companies, or fail to address highly specific needs.
Instead of marketing a laundry list of features (many of which may remain unused) to all customers, some vendors now unbundle their feature offerings to allow customers to tailor their own experiences. Ultimately, it allows customers to buy only what they need or use, and to no longer feel at the mercy of suite vendors.
5. Bottom line: Prepare for More SaaS in all shapes and sizes
We’ve watched the SaaS market grow exponentially over the last decade and fully expect it to continue to outpace traditional, enterprise software in the coming years. In fact, Gartner predicts end-user spending on SaaS will surpass $171 billion in 2022, a 42% increase over 2020.
In short, SaaS will continue to grow and expand to even more industries. From major SaaS tools deployed organization-wide to MicroSaaS tools that serve niche needs — make sure to keep up with the latest software trends for 2022 and beyond.
Looking for additional SaaS trends for 2022? Download Zylo’s SaaS Management Index
As SaaS explodes worldwide, the need for SaaS Management becomes more critical than ever. Get your copy of the 2022 SaaS Management Index to learn deep insights to help you rock SaaS optimization all year long.