11 Important SaaS Trends For 2021-2025

by Josh Howarth - November 25, 2021

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Here are the 11 most significant trends in the Software as a Service (SaaS) industry happening right now.

We'll also cover the key companies and software products leading the way.

In short, this list of SaaS trends will help you get a feel for what’s coming around the corner.

Let's jump right into the list.

1. Increased demand for collaboration software

A report from Owl Labs found that nearly 70% of all full-time employees in the USA are now working from home.

And many companies are finding that email isn’t enough to keep everyone on the same page.

Enter: a rising number of collaboration software options.

Slack, with 10M+ users, is obviously the king of the mountain when it comes to collaboration tools.

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Search volume for "Slack", the uber popular chat-based collaboration software (1,233% growth in ten years).

But there’s still plenty of room for tools that help remote teams get things done.

Especially those that don’t compete directly with Slack.

For example, Codepen has quickly gained market share in the growing "SaaS for coders" market.

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Searches for "Codepen", a collaborative coding tool, are following a general upward trajectory (70% over five years).

2. Martech becomes more accessible

Martech is known for old-school practices, like:

  • Product demos
  • Pushy salespeople
  • Sky-high enterprise pricing
  • Lengthy contracts

But there’s an increasing number of martech startups bucking this trend.

Instead of product demos, they have clear, transparent pricing.

And instead of complicated enterprise software with a million features, they do one thing well.

Canva is one of the best examples of the growing “accessible martech” trend.

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Interest in "Canva" is up 1,150% since 2017.

Canva makes it easy for non-graphic designers to make images for blog posts, email newsletters and social media.

Unlike martech from back in the day, you don’t need a product demo to see the tool in action.

In fact, there’s a free trial.

And instead of “contact us for pricing”, Canva has a list of their different plans that anyone can see.

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Canva's clear pricing separates it from martech companies of old.

The SEO software suite Ahrefs is another example of the accessible martech business model.

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Searches for SEO software company "Ahrefs" have grown (85% since 2017) largely due to its product designed for individuals and small teams over enterprise.

Their branding, UX, pricing, and trial accounts are all designed to appeal to individuals and small businesses.

3. More vertical SaaS products emerge

Vertical SaaS is software created for a very specific niche.

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Search volume for "vertical SaaS" over time. Raw searches are still low, so fluctuations are to be expected, but searches are up 314% over a five-year period.

For example, Brightwheel is an app designed specifically for people that work at day care centers.

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Brightwheel is an example of a software product designed for a very specific vertical.

Not middle schools. Not high schools. Just daycare.

This means they can tailor their product to meet the specific needs of daycare center staff.

Don’t confuse “niche market” with “too small to be worth your while”.

According to Crunchbase, Brightwheel has raised $88.8M in funding to date.

Why is vertical SaaS on the rise?

Well, the great thing about SaaS is it’s dirt cheap compared to building software from scratch.

For example, let's say you want an accounting software for your tennis court business.

Back in the day, you’d have to pay Oracle $250k to make a tool just for you.

Today, you can pay $50/month to access a SaaS solution that does basically the same thing.

But that compromise comes with a cost.

Do you know that feature that helps you quickly note whether a customer is playing singles or doubles?

Well, that feature likely won't be available in a mainstream SaaS product because only a small fraction of their users would need it. Even though that one feature would save you two hours every week.

Which is leading many people to ditch one-size-fits-all solutions.

Instead, they’re turning to micro-SaaS products that meet their very specific use cases.

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Searches for "micro SaaS" since 2017.

And entrepreneurs that create software products specifically for niche markets have the potential to grow super quickly.

4. AI Integrates into more software

Artificial intelligence is getting integrated into the software of all types.

Including many that you might now expect.

For example, Remove.bg uses AI to automatically remove background from images.

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RemoveBG is one of many SaaS companies using AI to enhance their software. Searches have increased by 99x+ in the last five years.

That’s not to say that your software needs a machine learning algorithm to get traction.

But more and more people are expecting AI as a feature.

(Especially in B2B)

For example, Flowrite uses AI to automatically create copy for emails and collaboration tool messages.

In the B2C software space, Spotify uses machine learning to help its personalized song suggestions.

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Spotify's homepage is populated with songs that a machine learning algorithm picks out.

They don’t boast “we use machine learning!” on their homepage.

But their AI integration is an important part of how Spotify became a market leader.

That said, there are no shortage of startups that use machine learning as part of their positioning.

One example of this is Alphasense.

They put their AI-focused software front and center:

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Alphasense makes AI part of their branding and positioning.

5. Low-code becomes the norm

Coding software from scratch is quickly becoming a thing of the past.

Instead, a growing number of software developers are building apps and websites with low-code platforms.

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Searches for "low-code" exploded in 2018 and have kept on growing (up 2,250% over five years).

In fact, Research and Markets reports that the low-code industry could be worth $187 billion by 2030.

Low-code is just like it sounds: it’s developing an application with minimal coding.

Why is low-code such an important SaaS trend?

First of all, building an all with a low-code platform like Ninox can save lots of development time.

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"Ninox" is one of many growing (48% over five years) platforms that helps people create software with no-code or low-code tools.

Instead of manually coding something line-by-line, a low-code platform can help you build applications with “visual programming”.

In other words: a drag and drop style interface. But for coding.

Low-code (and its cousin, no-code) opens up app development to the millions of non-coders that want to get into the SaaS market.

For example, maybe you know a little bit of Ruby on Rails or Javascript.

But not enough to create an entire application.

Well, you can use a low-code platform to build a lot of the key features that you want in your software product.

And you can manually code the rest.

For example, Lattice built and now runs their entire website on a no-code environment (Webflow).

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Lattice, like many established companies and startups, are turning their web development over to low-code platforms.

We can expect more web and mobile apps to be developed and deployed via low-code platforms in the coming years.

6. PaaS platforms help startups scale faster

Amazon’s AWS has been an absolute game changer for the entire SaaS industry.

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Amazon AWS is used by thousands of SaaS applications.

Before AWS, startups had to build their own server infrastructure.

And were required to figure out how to scale up and deploy add-ons as they grew.

Today, most SaaS products host everything on Amazon’s cloud platform.

Thanks to PaaS ("platform as a service") platforms like AWS, startups can focus on what they do best: making awesome software.

For example, meal delivery app Deliveroo used AWS's EC2 to help them scale as they achieved rapid and unexpected growth.

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Like many growing apps, Deliveroo runs a lot of its infrastructure on AWS. Search interest has increased by 26% in five years.

Over the last few years, AWS has expanded well beyond cloud computing.

Today, AWS has dozens of different products, including:

  • Amazon CloudSearch (search engines)
  • Amazon Lightsail (servers)
  • Amazon Sagemaker (machine learning)
  • Amazon Gamelift (video game hosting)
  • AWS IoT core (internet of things app)

In short, AWS is pulling an Amazon: slowly expanding until it becomes “one stop shopping” for software developers.

7. SaaS founders double down on content and SEO

Thanks to low-code tech and cloud platforms like AWS, launching a SaaS app is easier than ever before.

The hard part?

Getting people to even know that your software exists.

Sure, social media and Facebook ads have their place.

But they have serious downsides.

Social media can be very hit or miss.

Plus, organic reach on social networks like Facebook and Instagram is way down.

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Organic reach is down across many social networks.

Facebook ads are great to get early traction.

But it’s tough for pre-revenue SaaS companies to scale with.

Which is why an increasing number of SaaS companies are tapping into content marketing and SEO to get traffic and users.

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Searches for "SaaS SEO" are up 630% since 2017.

For example, HubSpot has built an $866+M B2B SaaS business largely on the back of SEO.

Why the push into SEO and content?

Unlike Facebook ads, content marketing and SEO are relatively cheap (even free if you use a CMS like WordPress).

Plus, organic “reach” on Google is still quite high.

Sparktoro reports that about half of all Google searches result in a click on the organic results.

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Google's organic CTR is lower than it used to be. But it’s still much higher than most social media networks.

Google's organic CTR is lower than it used to be. But it’s still sky-high compared to most social media networks.

8. New tools to fight churn

A high churn rate can mean death for a SaaS startup.

And there’s no shortage of tactics that software companies use to improve customer retention:

  • User onboarding email sequences
  • “Concierge” support
  • Explainer videos and tutorials
  • Annual billing
  • New feature notifications
  • Improving the overall customer experience

Do these tactics work? Yes.

But for many SaaS businesses, they’re not enough.

This is why there’s a growing number of solutions out there specifically designed to combat churn.

For example, Bonjoro helps companies create onboarding videos that are personalized to each customer.

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Searches for "Bonjoro" have grown 2,200% since early 2017.

9. SaaS companies leverage employer branding

37% of SaaS founders worry about “hiring the best talent”.

This is why many SaaS businesses are taking a close look at their “employer branding”.

What is employer branding?

Employer branding is branding… for an employer.

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Search growth for "employer branding" is up 113% in five years.

In other words, it’s the approach that companies take to make themselves look like a great place to work.

And many Silicon Valley SaaS companies are using employer branding to attract the best developers and managers.

Employer branding includes things like:

  • A company’s core mission
  • Interesting benefits (like a weekly massage stipend)
  • Major media mentions
  • Revenue and user growth metrics
  • A famous founder
  • Team activities

Squarespace does a great job of employer branding on their careers page.

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Squarespace, like many SaaS companies fighting for tech talent, positions itself as a great place to work. 

If you’re an amazing JS coder, you can work pretty much anywhere.

So your decision comes down to the type of environment that you want to work in. And your perception of that environment comes largely from a company’s employer branding.

10. Growth of note-taking apps

When it launched in 2008, the Evernote mobile app offered something novel:

The ability to quickly take notes on your phone, and see them on your desktop later.

It was paired with freemium pricing, which was also uncommon at the time.

This made Evernote the default note-taking tool for hundreds of millions of users.

But today, the market for notes apps has splintered.

There are free options like Google Keep, Apple Notes and Microsoft OneNote.

As well as tools like Notion (recently valued at $2B), Obsidian, Liner, and Memex.

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Search growth for "Notion" is up more than 3x over the last 24 months.

Some tools “zoom-out” from Evernote’s feature set by relegating note-taking to just one small function.

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Notion bills itself as "the all-in-one workspace". It's commonly used on desktop. But the UI is designed to be mobile-first.

While others “zoom in” to focus on a single function of Evernote striving to do that one thing much better.

And there are plenty of apps that start with Evernote’s basic blueprint and then improve on it in some way.

Like Bear, which adds automatic categorization and Markdown support.

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Bear is one of many fast-growing note-taking SaaS startups.

Or Roam Research, which is based on the concept of “networked thought”: a system of linking between related notes.

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Interest in "Roam Research" skyrocketed in 2020 (up 1,900% since 2017), causing the company to temporarily halt new signups while improving performance.

Or Ulysses, which offers goal tracking, direct publishing to Medium, and customizable themes.

Evernote was considered niche when it launched. And it went on to become a tech unicorn.

But now that the app category it started has exploded, we may see many more.

11. More cross-platform organization tools launch

Companies of all sizes are running into an increasingly common problem:

Company data is often scattered in 100 differnt places. 

According to Harvard Business Review, that creates a barrier to growth as valuable information can’t easily be accessed across an organization.

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HBR reports that disorganized data impairs a company's ability to grow.

A variety of SaaS startups are emerging to solve this problem.

The first group is document management systems.

Document management systems create a single place of access for employees to find documents that are scattered across different cloud platforms and collaboration tools.

For example, Nira (originally "FYI") says its interface lets users get to any document in 3 clicks or less.

The bootstrapped SaaS offers a number of different integrations designed to streamline and automate documents from several different apps.

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Nira's browser-based interface.

While ExpanDrive and Odrive help organize cloud storage folders by mounting them to users’ desktops for easy access.

Other products serve as a repository of visual design assets for marketing departments.

These are called digital asset management solutions.

The global digital asset management industry is projected to grow from $3.4B in 2019 to $8.5B by 2025, for a CAGR of 16.5%.

Digital asset management tool industr...
Digital asset management industry growth.

Digital asset management tools include:

Lingo, which was founded in Los Angeles in 2016 and has customers like Lowe’s, Headspace and Target.

Or Third Light, which was founded in England in 2002.

It has customers including Virgin, PetCo and Dow Chemical.

As well as Canto, BrandMaster, Imageshop and Getty Images Media Manager.

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Canto is one of many growing "digital asset management" startups.

Another type of product addressing the scattered data problem is called an Integration Platform as a Service (iPaaS).

The global iPaaS industry was worth an estimated $1.9B in 2020 and is forecasted to reach $10.3B by 2025, for a CAGR of 40.4%.

iPaaS products offer back-end functionality for larger businesses.

Their goal isn’t to help users find documents and files.

Instead, iPaaS is engineered to connect the data “pipes” of an organization via APIs.

undefinedSearch volume for "iPaaS" has been growing steadily, and is up 182% since 2017.

MuleSoft (owned by Salesforce) boasts customers like Airbnb, Coca-Cola, Netflix, Unilever, and Verizon

Talend’s customers include Toyota, Domino’s, Bayer, and L’Oreal.

Boomi is owned by Dell and has customers like Dropbox, Moderna, 23andMe, Cornell University, and LinkedIn.

Login management is another related space with an increasing number of SaaS startups entering the fray.

According to LastPass, the average employee is managing 191 different passwords.

Single sign-on (SSO) software and password managers help solve that problem.

SSO software lets users sign in using sessions, not passwords.

While password managers store multiple logins behind a single master password.

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Searches for “single sign-on” have increased by 110% in the last five years.

One of the most popular password managers is LastPass.

The browser extension is used by over 25 million users and 70,000 businesses.

It also offers SSO functionality at its higher pricing tiers.

LastPass’s parent company LogMeIn was acquired by Francisco Partners and Evergreen Coast Capital for $4.3B a few months ago.

Competitor 1Password claims over 60,000 businesses in its user base (including IBM, Slack and Dropbox).

Unlike LastPass, it doesn’t offer a free tier or SSO — just password management. The Toronto-based SaaS raised a $200M Series A led by Accel in 2019.

Other password managers include Dashlane, OneLogin, and the free and open source KeePass.

Conclusion

That’s our list of the 11 biggest trends in the SaaS industry right now.

From recruiting, to churn, to automation, the software world is always in flux.

And if you want your software company to do well, the fundamentals are super important. But to really thrive, it’s important to keep tabs on the biggest trends.

We hope this report helped you get a glimpse into the future of SaaS.

Written By
Josh Howarth
Co-founder of Exploding Topics.
548 Market St. Suite 95149
San Francisco, California
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