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SaaS market trends 2014 reviewed

In 2014, I predicted that the SaaS market will evolve as (in Quora):

  1. There will be greater debate on two tier systems, as more and more companies learn to live with on premise (including legacy) and SaaS, adopting a hybrid solutions.
  2. SaaS vendors will continue to be pulled in two directions, i.e. best of breed (single product) to multi product (driven by the need for greater revenues, e.g. Box).
  3. The middle market will continue to cause confusion due to products that specialise for smaller companies (no sales team), and the rest focusing on larger companies (sales team). The biggest land grab is here.
  4. Consolidations will start to bite others (e.g. Salesforce eating into Mailchimp and ConstantContact via Exact Target acquisition). [Observation by @clintwilson].
  5. Larger companies will increase acquisition spree in their defence against Salesforce, as Salesforce continues to diverse from their core CRM strength.
  6. Surfacing information will become even more important. These tools will enable enterprises to extract further value from legacy and on-premise solutions.
  7. Enterprises will start to have their own in-house AppStores.
  8. Enterprises will become truly social, adopting own solutions to break worker-manager barriers for higher collaboration and productivity

2 years down the line, here are my views about the above:

  1. Whilst hybrid remains a real option, the pendulum is swinging towards greater use of SaaS, especially as early adopters start experimenting with bots to achieve a competitive advantage. It will nevertheless take longer for the enterprise to adopt latest cutting edge technologies.
  2. Best of breed continues to dominate the market. However, there is a resurgent of all inclusive products where one product attempts to service all your needs. Instead of marketing as modules, these are now referred to as Apps.
  3. As software products mature, these vendors continue to move up the value chain to the detriment of smaller customers.
  4. Consolidation has not wiped out those who remained independent. As the products mature and gain traction, the global giants are quickly snatching up these vendors.
  5. The largest players are consolidating their acquisitions into clouds, e.g. Marketing Cloud.
  6. The API economy is booming, which is helping vendors to reach out to larger markets.
  7. Not seen much evidence on this.
  8. Yes.
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