March 1, 2024

SaaS evolution and innovation to accelerate in 2024

By Norman Kretzmer, the founder and CEO of Contract Understanding

The software-as-a-service (SaaS) space is set for strong growth, with Gartner estimating that the value of the market will grow from around $204 billion in 2023  to nearly $244 billion in 2024. Relentless advances in technology, along with businesses’ appetite for solutions that enhance operational efficiency, are among the key factors driving adoption.

But we are still in the early stages of the SaaS market. Over the next few years, we can expect the evolution of SaaS to be characterised by more innovation, flexibility, and vendor focus on delivering value to customers with specialised solutions and enhanced user experiences.

Here are some of the ways the market is changing.

1.      AI everywhere

Artificial intelligence (AI) and machine learning aren’t new to software or to SaaS vendors. But the pace of innovation has dramatically accelerated over the past two years. Generative AI and large language models (LLMs) are gamechangers for SaaS vendors and their customers, helping to catalyse a new wave of innovation.

SaaS vendors are using gen AI to provide more intuitive user interfaces, design AI-powered support chatbots that are friendlier and more powerful and streamline software development. Some SaaS companies are using gen AI to create new products, such as powerful tools for automated post-signature contract management.

2.      Niche is nice

A trend towards more specialised SaaS solutions is gaining momentum as vendors come to market with solutions that are designed to do one process exceptionally well or address an unmet need in a niche market. This laser-focused approach addresses major business pain points with solutions that are quick and affordable to deploy.

Our company, for example, focuses on post-signature contract management because it is an underserved market. Generalist document management and workflow applications don’t address the nuances of this area well. While there are specialised solutions, most are too expensive and complex for small and medium-sized businesses to implement.

3.      Fortified data protection

With high profile data breaches hitting the headlines in South Africa in recent years, data privacy and information security are high on the agenda.  Given that the Information Regulator is showing a willingness to fine companies for breaching the Protection of Personal Information Act (POPIA), organisations are taking privacy and security more seriously than ever.

Companies are increasingly turning towards secure, cloud-based platforms to help them protect their most sensitive information. Features like end-to-end encryption, two-factor authentication (2FA), and regular backups are a must. Companies also want platforms that enable them to define user permissions for privileged information.

4.      True hybrid

The shift towards hybrid working models has accelerated the demand for SaaS collaboration tools, including video conferencing, project management, team communication, and virtual collaboration platforms. Since the pandemic, SaaS solutions have helped to support flexible working models, helping people and teams to collaborate from anywhere.

5.      Everything automated  

Automation is one of the major driving forces in today’s SaaS market. With budgets under pressure and competition heating up, many organisations are looking for quick wins from process automation. SaaS solutions address inefficient manual processes and business pain points with tools to streamline work.

In post-signature contract management, for instance, manual methods like spreadsheets are sources of inefficiency, errors, and complexity challenges. Replacing manual methods with cutting-edge AI to efficiently extract and organises data helps reduce costs and improve consistency.

6.      Software on demand

There is a move away from complex SaaS solutions that involve long sales cycles, extensive customisation, and lengthy implementations. Self-service SaaS or on-demand SaaS offer easy sign up without significant upfront commitments. Users can manage their subscriptions, scale services up or down, and access features on-demand, all with minimal intervention from the service provider.

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