SaaS Trends of 2021 Every Business Owner Should Know

Masha Panchenko

The Software-as-a-Service industry is one of the lucky ones who not only survived the pandemic but managed to grow and attract new clients and investments.

As a SaaS design agency, we know very well how dynamic this business is. To capture all the freshest SaaS trends, consulting companies have to keep a finger on the pulse 24/7.

If 2020 has taught us anything, it is that forecasts are very unsure. Well, not only forecasts... Here, we are bringing up the trends that shape the future of SaaS right now, without trying to make any crystal ball foretelling (ok, maybe just a little bit).

SaaS tech trends

Artificial Intelligence

AI has been on the top SaaS trends list for quite a few years. Yet it will remain on the list in 2021 as well. Let’s look at the Gartner hype cycle for emerging technologies to see at what point is the AI now.

Hype Cycle for Emerging technologies, 2020
Image credit: Gartner. View full-size

Gartner hype cycle is a curve that illustrates the life cycle of every innovation, technology, trend, or novelty concept. The X-axis is for expectations, y-axis for time. 

When technology first appears, it receives lots of attention, before any effectiveness or profitability is even proven. This stage is called Innovation Trigger. Current starting technologies: AI-assisted design, private 5G.

Then, the curve rises rapidly and reaches the Peak of Inflated Expectations. The new technology already had investments and different applications, both successful and not. As for 2021, embedded AI and social distancing technologies are at the peak.

After reaching the peak, the curve of expectations falls to the Trough of Disillusionment. At this point, the failure of many experiments becomes obvious. Only those few that can prove the efficiency of the new technology receive investments.

Next comes the Slope of Enlightenment. The successful early adopters continue to improve their products, new applications are being found, but this time it is conscious usage rather than hyped experiments.

The slope goes steady until it reaches the Plateau of Productivity when the technology is known and accepted in mass. Technology is working and the investments are not as risky as at the start.

Hype cycle for Artificial Intelligence, 2020
Image credit: Gartner. View full-size

Artificial Intelligence is such a massive trend, that Gartner dedicated a separate hype cycle to it. AI stays at the peak of SaaS trends because there are new types emerging constantly: formative AI, composite AI, generative AI, Augmented Intelligence…

AI is taking over and the question is not about being the first to use it- nearly everyone is doing it already, so the most important is to avoid the itch to innovate for the sake of innovation. First of all, we have to think about how it can help solve the existing problem (if it can, of course).

The most promising fields to use AI in 2021 are:

• Data security

• Support service (chatbots, onboarding, etc)

• Environmental

Statistics claim that using AI for environmental applications will account for a -6,1% reduction in greenhouse gas emissions in North America in 2030. Because if AI doesn’t save the planet, only a miracle would.

North America: decline in GHGs -6.1%  Europe: decline -4.9%  East Asia: decline -4.8%   Indo-Pacific -2.4%  Middle East and North Africa -1.7%  Central and South America -0.9%  Sub-Saharan Africa -0.2%
Using artificial intelligence (AI) for environmental applications: impact on greenhouse gas (GHG) emissions worldwide in 2030, by region. Image credit: Statista. View full-size

And if you are not yet convinced in the potential of this trend for SaaS, here are the numbers. The global artificial intelligence (AI) software market is forecast to grow rapidly in the coming years, reaching around 126 billion U.S. dollars by 2025.

market revenue growth in billion US dollars. From 10.1 in 2018 projected to reach 34.87 in 2021 and 126 in 2025
Artificial intelligence software market revenue worldwide 2018-2025. Image credit: Statista. View full-size

Low-code or no-code

The trend for using no-code or low-code tools for developing parts of the product is a blessing for SaaS business owners. Benefits are cost and time savings. Using no-code tools lets all team members partake in the development process, not only the professional developers. 

Another benefit is that the product will have a unified structure, unlike custom-built code that will be hard to understand once a developer leaves the company and you hire a new one. 

Low-code and no-code tools are great for improving customer support, building chatbots, notification managers, or a whole application. Your developers will thank you for taking away boring tasks and letting them focus on core functions of the product.

We at Eleken are all-in for no-code and low-code solutions. Our website is built entirely with Webflow, a great tool for making landing pages. Without using any code we could focus on what we do best: UX/UI design.

SaaS market trends

The main trend of the SaaS market is very simple: the market is growing even during the crisis. SaaS adoption trends leave no doubt in the future of the industry. According to the report by BetterCloud, in 2020 companies were using on average 80 SaaS apps (5 times more than in 2017 and 10 times more than in 2015).

Tendencies that defined the market in the past years continue to rise: micro SaaS (small companies focused on one solution) and vertical SaaS (products targeted at a particular type of business rather than providing solutions to everyone). To learn more about long-playing industry trends, read the SaaS market overview

One more trend that is worth mentioning is how SaaS starts relying more and more on branding rather than development. 

White-label SaaS

White labeling is the business of licensing generic SaaS products to other enterprises so they can brand them, use them, and sell them as their own. Buying a ready solution is often cheaper and faster than developing one from scratch, especially when you have little expertise in the field.

Hi! Choose your brand: Labelify; Labelly; Label...

White labeling has been around for a while, but the market is growing constantly. Call it a long-term trend that is here to stay. In future, white-label SaaS may become popular not only as a side app but as a principal product. When you have a strong brand and good marketing, development can be secondary.

Some examples of white-label SaaS are LevelUp (payment/loyalty program app) and AppInstitute (app builder for small business owners).

SaaS marketing trends

Marketing trends go hand-in-hand with tech: AI opens new opportunities for the personalization of communication, no-code tools help with email automation. Yet there is a specific trend that is very relevant in SaaS marketing in 2021.

Unbundling

Times when SaaS products desperately tried to stuff more features into different subscription plans are gone. Well, not gone completely, but that is not a rule of thumb anymore. Now that people understand that less is more and overserved customers often experience frustration. Often having so many features that you are not using makes you feel like you are wasting money.

The solution came in unbundling – splitting features into separate products that can be purchased separately. This trend opens new possibilities for upselling: once customers are happy with a product, they are more likely to try an additional feature.

SaaS pricing trends

Pricing models in SaaS become more and more diversified with time. Monthly or yearly flat-rate subscriptions or freemium is not the default choice anymore. Companies tend to have a custom approach to pricing. In some cases, the right pricing model is more efficient than the simple “cheaper than the competitors” approach.

Nowadays 38% of SaaS companies charge based on usage, and it helps to solve a common issue of “wasted” software that enterprises pay for but don’t use. It works like a classic gym business model, where the majority of revenue comes from those who buy a year-long membership but never go. What is good for a gym, may not be good for a SaaS: in the long-term, it will end in high churn rates and lack of positive referrals.

SaaS pricing will be reinvented in the next few years, and not just once. A survey by OpenView shows that 77% of companies revisit their pricing at least once a year 43% of them do it even more often.

Image credit: OpenView. View full-size

SaaS design trends

Mobile-first

Adjusting the design for mobile devices before making a desktop version is not a new thing in UX/UI design. Designers do it not only because the number of mobile users grows all the time, but also because designing an app for a small screen is more challenging than for a full-size desktop. 

If you want to see what mobile-first design looks like, look at the case of our client, PublishXI, a corporate learning management system.

Now the number of people who use mobile devices for work tasks has grown so much that the mobile-first approach defines not only the designer workflow. When the app is designed for a smartphone, its functionality may be different from the one designed for a desktop. It also has an impact on marketing, sales, and development strategies. 

When we think of mobile apps, the ones that come to mind first are individual-use messengers, lifestyle, games. However, smartphones are being used for business more and more. That is how mobile-first became a leading trend in B2B SaaS as well.

Larger size of UI elements

You may say it’s not the most cutting-edge design trend over there, right? True, but think of what it means for the advance of inclusive design. When so many designers strive to provide solutions for people with all sorts of disabilities, sometimes their products are not accessible for 60+ y.o. folks whose eyesight is not as sharp as it used to be. So yes, this little shift in font/button size is a big step towards inclusivity.

Final thoughts

Hopefully, now you understand a bit better what direction the SaaS industry is moving in 2021. Technology means a lot, but often it’s marketing, pricing, or design that makes the biggest difference. The trends are a tricky thing, but those who notice them first and use them wisely, stay one step ahead of the competitors. There are just a few of SaaS trends for 2021, but that’s just the beginning.

Does SaaS business sound like a good place for you? If this article made you interested in joining this dynamic world of emerging technologies, read our article on how to launch a SaaS product.


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