SaaS Solutions: A study has examined which trends are currently determining the market for SaaS solutions. SaaS solutions (Software as a Service) have now established themselves in almost all industries. The SaaS market has reached a considerable overall size and is still very much on the move. calculated a market capitalization of over 400 billion US dollars for the ten largest SaaS providers alone. The number of offers and providers is correspondingly large. With the quarterly “Global Software Market Perspectives Report,”
SaaS Solutions: Business Analytics Is In Demand
The market is changing, and the chances of winning new customers increase for companies that use the right strategy. For this, software providers must look outside the box and analyze which market segments they can and want to grow into. As a core strategy for expanding the “Total Addressable Market” (TAM), tech companies increasingly rely on business analytics.
With the help of business analytics, companies can analyze exactly what needs certain target groups have and which of their products can best cover them. If implemented correctly, companies can use business analytics to create forecasts for future developments and align their business activities accordingly. However, current restrictions make it difficult to use and evaluate the data fully.
Enterprise application developers are now expanding their applications to include business analytics functions to gain market share and offer customers software applications and business intelligence tools from a single source. The trend promises a standardization of the daily use of data analysis within the company. This was recently underscored by Salesforce and Google’s successful takeover of the Tableau and Looker business intelligence platforms.
SaaS Solutions: Providers Are Rated Differently
In the case of software companies listed on the stock exchange, we see an increasing difference in the valuation multiples between the best providers in the market and those. They are only structured according to a traditional “SaaS” model. Investors place more value on differentiated businesses with strong profits, solid business management, and demonstrable capital efficiency.
This evaluation environment has become more attractive for companies to buy innovative solutions instead of developing them themselves. This can be seen, for example, in the merger of Dassault Systems and Madidate Solutions in June 2019. Further mergers and acquisitions are expected in the third and fourth quarters of 2019.
EdTech Solutions Are Gaining In Importance
Many professions are also changing as a result of digitization and innovations, and technologies. Today, various work tasks are preceded by a technical understanding that many must first acquire. Lifelong learning is becoming more and more important. This is where many EdTech providers come in. The number of professionals taking online courses is increasing. Learning platforms offer the opportunity to expand knowledge around the clock and at a low cost.
The demand for comfortable and inexpensive training has also attracted significant investment and promoted acquisitions. Many companies rethink human capital development and employee job satisfaction, and so does the EdTech market. This has set the M&A market in the EdTech area in motion.
Spending On SaaS Solutions Is Increasing
The result of a survey by Bytom Research and KPMG, in which more than 500 companies were asked about cloud computing in 2018, shows that more and more companies are relying on the cloud. Seventy-three percent of those surveyed stated that they already use cloud services in their company. But many companies do not have a concrete overview of their spending on cloud services. Third-party providers of automated cloud management platforms want to change that and enable IT managers to optimize their cloud strategy, capture real costs, and reduce them.
The keyword here is cloud migration, the potential of which more and more IT companies are recognizing. For example, Flex era, a provider of solutions for software licensing, IT security, and installation, took over Risk Networks, which specializes in cloud migration solutions, in April 2019. In May 2019, Patio took over Codability, a provider of the cost management platform. With this, the provider wants to expand its solution to multi-cloud and hybrid cloud environments and optimize cloud cost management. In the same month, with the acquisition of Park My Cloud, Turbonomic combined two companies that specialize in application performance management, cloud application migration, and cloud cost management tools.
Multi-Cloud Solutions Are Becoming Increasingly Popular
When companies get professional with their cloud strategy, they face the challenge of reducing IT costs, standardizing applications, and ensuring IT security. They also want to be more flexible. Multi-cloud strategies offer a solution for this. They make it possible to combine different cloud services from various providers based on the specific business, technical, regulatory, and budgetary requirements.
For example, VMware has also recognized the potential of the multi-cloud and expanded its cloud business with the takeover of Birnam. In spring 2019, Dell Technologies invested, along with other investors, in the company Faction. In total, Faction received $ 14 million. The company intends to use the fresh capital to expand its presence in the MSP and cloud services sector, among other things.
The Market For SaaS Solutions Continues To Move
The SaaS market holds enormous potential for companies and providers. More and more companies are relying on SaaS solutions, and the number of offers and providers is increasing accordingly. This means that the SaaS market is being advertised and growing massively. Although some consolidations and takeovers have already taken place, the SaaS market is still highly differentiated, with many promising providers. Further financing rounds, takeovers, and IPOs are, therefore, to be expected.