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In 2021, the tagline “SaaS is the future of software” became mainstream due to Oracle and Deloitte’s B2B SaaS podcast series. Since then, SaaS has become the most preferred solution for industry companies, affording everyone flexibility, functionality, and scalability in a highly competitive world. Today, we’ll look at the SaaS B2B buying trends that are likely to shape 2024 and beyond..
AI is transforming SaaS retail interfaces by using ML techniques to predict consumers’ behavior and recommend products they might be interested in. AI applications automate routine work and provide data-driven insights and personalized user experiences. Generative AI and chatbots are widely used among SaaS B2B companies to enhance user experience.
For example, Hubspot has an integrated chatbot that filters leads, sets appointments, and generates support tickets. This trend to use chatbots will continue to rise, as statistics indicate that chatbots yield 80-90% customer engagement rates compared to email marketing, with opening rates of as low as 21% across all industries.
According to the 2024 SaaS Inflation Index report published by Vertice, companies have raised their software budgets by 27% in the last year, primarily driven by price hikes and rampant inflation. Another worrying trend is shrinkflation, where vendors remove certain capabilities from a product, keeping the price intact.
The Vertice report also revealed that 54% of all B2B SaaS vendors use user-based pricing. This approach is, however, set to change as more vendors move to the consumption-based pricing model of business. A good example is Snowflake, a data management firm that has effectively implemented a credit-based model whereby organizations pay only for what they consume.
While horizontal SaaS sells to customers across sectors, vertical SaaS concentrates on particular sectors to address their unique needs. The rapid adoption of Vertical SaaS is evident in the meteoric rise of companies such as Toast, Procore, and Veeva. Veeva, for example, develops cloud-based solutions for the pharma industry that accelerate biomedical development and clinical trials.
One Forrester Consulting report shows that around 89% of IT leaders and executives consider vertical SaaS the future. The result is increased upselling opportunities, flexibility, and lower client acquisition costs for businesses. Smaller firms are, therefore, equipped with all the necessary features to make their daily operations more effective and efficient.
Over the years, the SaaS industry has become the target of many regulations and legal actions meant to stabilize the sector and protect its customers. Thus, some of the most concerning issues, such as network security, personal data protection, and compliance with legislative and contractual requirements, indicate a future defined by stricter regulation.
Governments worldwide are enacting data protection laws, such as the CCPA in California and the GDPR in Europe, to address these issues. While primary and existing legal frameworks show disparities, the future legal regulations of the SaaS B2B industry are expected to improve compliance measures considerably.
Interestingly, forty-one percent of companies consider “improving compliance management” as one of the critical corporate objectives in the coming years.
Looking ahead, developments like AI and integrated B2B SaaS solutions will shape SaaS B2B buying trends in 2024 and beyond. Furthermore, the significance of increased regulatory compliance will continue to surge, highlighting the need for SaaS businesses to tread this complex terrain carefully.
In 2021, the tagline “SaaS is the future of software” became mainstream due to Oracle and Deloitte’s B2B SaaS podcast series. Since then, SaaS has become the most preferred solution for industry companies, affording everyone flexibility, functionality, and scalability in a highly competitive world. Today, we’ll look at the SaaS B2B buying trends that are likely to shape 2024 and beyond..
AI is transforming SaaS retail interfaces by using ML techniques to predict consumers’ behavior and recommend products they might be interested in. AI applications automate routine work and provide data-driven insights and personalized user experiences. Generative AI and chatbots are widely used among SaaS B2B companies to enhance user experience.
For example, Hubspot has an integrated chatbot that filters leads, sets appointments, and generates support tickets. This trend to use chatbots will continue to rise, as statistics indicate that chatbots yield 80-90% customer engagement rates compared to email marketing, with opening rates of as low as 21% across all industries.
According to the 2024 SaaS Inflation Index report published by Vertice, companies have raised their software budgets by 27% in the last year, primarily driven by price hikes and rampant inflation. Another worrying trend is shrinkflation, where vendors remove certain capabilities from a product, keeping the price intact.
The Vertice report also revealed that 54% of all B2B SaaS vendors use user-based pricing. This approach is, however, set to change as more vendors move to the consumption-based pricing model of business. A good example is Snowflake, a data management firm that has effectively implemented a credit-based model whereby organizations pay only for what they consume.
While horizontal SaaS sells to customers across sectors, vertical SaaS concentrates on particular sectors to address their unique needs. The rapid adoption of Vertical SaaS is evident in the meteoric rise of companies such as Toast, Procore, and Veeva. Veeva, for example, develops cloud-based solutions for the pharma industry that accelerate biomedical development and clinical trials.
One Forrester Consulting report shows that around 89% of IT leaders and executives consider vertical SaaS the future. The result is increased upselling opportunities, flexibility, and lower client acquisition costs for businesses. Smaller firms are, therefore, equipped with all the necessary features to make their daily operations more effective and efficient.
Over the years, the SaaS industry has become the target of many regulations and legal actions meant to stabilize the sector and protect its customers. Thus, some of the most concerning issues, such as network security, personal data protection, and compliance with legislative and contractual requirements, indicate a future defined by stricter regulation.
Governments worldwide are enacting data protection laws, such as the CCPA in California and the GDPR in Europe, to address these issues. While primary and existing legal frameworks show disparities, the future legal regulations of the SaaS B2B industry are expected to improve compliance measures considerably.
Interestingly, forty-one percent of companies consider “improving compliance management” as one of the critical corporate objectives in the coming years.
Looking ahead, developments like AI and integrated B2B SaaS solutions will shape SaaS B2B buying trends in 2024 and beyond. Furthermore, the significance of increased regulatory compliance will continue to surge, highlighting the need for SaaS businesses to tread this complex terrain carefully.
