5 SaaS trends for 2020
5 SaaS trends for 2020 - CIO Dive
by: Roberto Torres and Samantha Ann Schwartz
Jan 8, 2020
Photo Credit: Photo by Marvin Meyer on Unsplash
The cloud and software as a service transformed desktop workloads. Organizations still have SaaS reservations, including governance and security concerns, but most businesses are SaaS-happy. Microsoft owns the largest portion of the SaaS market, followed by Salesforce, Adobe, SAP and Oracle, according to Synergy Research Group's Q1 2019 report. While vendors are distinguished in the space, areas of expertise vary. Microsoft's presence is felt across SaaS segments, but Oracle leads ERP, Workday owns HR and Salesforce is holding tight to CRM. With each company fighting for a place in the SaaS domain, meeting customers' needs and helping businesses achieve a sense of flexibility is an area for vendors to create differentiation.
SaaS trends to watch in 2020:
1. Low-code platforms will open the door to faster iteration
Adoption of low-code platforms — when done right — can enable quick tech iteration by providing business stakeholders tools to streamline workflows.
Developers, too, have embraced the technology. Half of developers say they've either adopted or plan future adoption of low-code tools, according to Forrester. In 2020, low-code platforms will become available to more workers inside the organization, as business leaders search for ways to power innovation.
Though a number of small- to mid-size players have a strong position in the market, larger vendors such as Microsoft and Salesforce will leverage existing relationships to expand use of their low-code platforms.
"With the increasing need to bridge silos, developing enterprise applications with faster release cycles will result in the increasing adoption of low-code platforms," said Vijay Pullur, CEO of low-code platform WaveMaker, in an email to CIO Dive.
2. Communication is consolidating
Bundled cloud-based services pushed companies toward a holistic solution. Companies have landed on G Suite and Office 365 as a hub for all workloads. Communication is bleeding into a limited SaaS ecosystem.
In the last five to 10 years, companies have been looking for tools that meet them where they are.
Employees want tech to come to them, instead of having to reach for a digital asset or leave a platform to go collaborate, Jean-Marc Chanoine, global head of Strategic Accounts at Templafy, told CIO Dive.
The communication and collaboration market is shrinking. There used to be 35 to 40 vendors, according to Art Schoeller, VP, principal analyst for Forrester, but it has shrunk to mostly heavyweights including Teams, Slack, Atlassian, Google, Dropbox and Smartsheet.
There are about five more years until the market plateaus, according to Gartner. Acquisitions are helping vendors squeeze in as many customers as they can before the plateau.
Legacy providers are breaking the confines of voice-only or message-only communications, which is what Cisco did when it acquired Jabber. RingCentral's acquisition of Glip and ServiceMax's acquisition of Zinc are carving a niche market to appeal to specific industries, like frontline employees, leaving the heavyweights to compete for enterprise customers.
If acquisitions aren't feasible, APIs will become more valuable for cementing integrations.
Pure-play communication vendors have to create a solution that "plays well with the winners that are already there," said Chanoine. "You're going to end up with a lot of frenemies."
3. Software developers will move more closely to line of business
Digital transformation won't bring minor tweaks to how businesses operate. Instead, it will represent fundamental changes to what business do.
In order to bring about a smooth transition, most companies will need technical know-how at virtually all parts of the company. As outlined by Forrester in its 2020 predictions for software development, a "dev diaspora" will embed more technologists inside company divisions.
"Business stakeholders outside the IT org feel the increasing need to ramp up their own software capabilities and not rely on IT organizations or outsourcing," said Chris Mines, SVP and research director at Forrester, in an interview with CIO Dive.
Providing business units with technical resources will increase the need for tech talent. One way companies will attempt to meet those needs is to embrace a larger share of workers from non-technical backgrounds, offering access to reskilling programs "as part of their onboarding process," said Nancy Hornberger, EVP of healthcare at ElectrifAi, in an interview with CIO Dive.
Currently, less than 10% of rank-and-file staffers are involved with digital transformation efforts. That number is set to increase as digital transformation touches more sides of the business.
4. Software heavyweights bank on their strengths to increase customer use
In the coming year, more industries will infuse their processes with technology. For some, that process will mean reshaped business models and renewed spending priorities.
As competition in the software market heats up, count on familiar names such as Microsoft, Google and Salesforce to lean on existing strengths to broaden their market presence.
Leveraging the presence of their most popular offerings, vendors will seek to "land and expand" by providing additional layers of service and increasing customer reliance on their products.
Microsoft closed out the year talking about "tech intensity," a premise that calls for organization's abilities to create problem-solving tech solutions. In 2020, Microsoft will lean on that idea, and its widely used set of enterprise tools, as it tries to edge out the competition.
Players including Salesforce and Google will in turn push to raise the relevance of their tool suites. The former will rely on its "Customer 360" branding to harness a more loyal enterprise following. For Google, continued growth in the cloud business and the ubiquitousness of G Suite apps signals an entry point for untapped markets.
5. Slack is becoming home base for multichannel experiences
Employees cling to the technologies they use in their personal lives, craving the same experience in their professional lives.
The line between personal and business tech continues to blur with the adopting and advancement of platforms like Slack, Microsoft Teams, Workplace by Facebook and Zoom to the forefront of communication.
"Multichannel chat has really taken the world by storm," Mike Hicks, CMO of Igloo, told CIO Dive. However, there is still misunderstanding in "knowledge management," including how information is structured and stored in multichannel chats.
Vendors have to answer for "when people are essentially having shouting matches around a water cooler on a variety of different topics," in a communication channel, said Hicks.
Companies craving more capabilities are forcing communication vendors to become a more general platform for services. In April, Slack introduced a slew of Microsoft Office 365 integrations so its platform can serve as a home base for enterprise tools. Google has a similar suite of Slack integrations.
Slack is putting competitors' offerings inside its platform to accommodate work styles and how people want to get into those various tools," said Hicks. "How do you integrate them into a holistic destination where people can actually start your day and not feel like you're hopping all over the place to get work done?"