Written by GoodData Author |
Technology and cloud trends are shaping companies’ technology buying decisions and how they build and grow their businesses. By watching and understanding these trends, product companies can then figure out how to mitigate threats and position themselves for new opportunities, as well as how to improve weaknesses by leveraging market opportunities and how to eliminate weaknesses and avoid threats from competitors.
As a product manager, it's one of my favorite things to do! I spend time reading about all corners of the market, from economics and technology to political landscapes and buying patterns. I soak up everything I can from great sources like Markets and Markets, McKinsey, IDG, RightScale, Crunchbase, Forbes, Gartner, Forrester, Accenture, DORA, Puppet, Blissfully, Statistica, Redgate, Outsystems, LogicMonitor, and the legendary yearly Internet Trends report—basically everything.
Once I’ve read through all of this information, I like to summarize my key findings and conclusions in a market research document, which I then use to drive our internal product strategy. I just wrapped up my most recent market research, and I wanted to share what I think are the top five most important trends for SaaS companies and product managers.
My prediction: Get these trends right as a product company, and you will amplify your growth.
1. Cloud is the new on-prem, so build in the cloud
Forrester is making predictions about the cloud market, and they’re not just about the overall compound annual growth rate. Forrester predicts that more than 50% of businesses will use at least one cloud platform, and the State of the Cloud shows how public cloud spending is growing three times faster than private cloud usage.
So what's driving the race to the cloud?
Growing data volumes and changing technology are huge factors driving cloud adoption. First, 90% of the world’s data was created in the last two years (though only 1% of that data is being used effectively). Along with that massive growth in data, we’re seeing rapid changes in technology from storage, compute power, and big data technology. Combined, these two forces are driving businesses to embrace the use of Platforms-as-a-Service to stay ahead of the competition and potential market disruptions.
Specifically, they’re using PaaS services for data warehousing and analytics. According to the 2018 IDG Cloud Computing survey, Data Warehousing/Data Analytics is the second-largest opportunity for cloud adoption.
As a SaaS company, it’s important to be aware of this trend. Why is data and analytics the fastest growing cloud opportunity? Because analytics is changing how SaaS companies are improving their customer experience, optimize marketing spend, differentiating their product to stay ahead of the competition, or increasing adoption and growth. If you're not using analytics in your product, or you need to modernize your reporting, it's time to get it on your roadmap. This brings me to my second point.
2. Analytics and machine learning need to be on your roadmap
According to Gartner, the BI and analytics market is forecast to increase from $18.3 billion in 2017 to $22.8 billion in 2020. By 2020, Gartner believes that augmented analytics will be a dominant driver of new purchases of business intelligence tools, machine learning, and embedded analytics.
However, one of the big challenges with big data and analytics is gathering all the relevant data from disparate sources and converting it into a format that allows for it to be analyzed easily. Furthermore, Gartner says that integrating and preparing data for analytics and data science is crucial to data and analytics success. And, because this is an iterative and resource-intensive task, the data engineer role is equally critical. They believe that building data pipelines for analytics or data science requires a combination of domain and data expertise—but both of those are currently in short supply within organizations.
It's a costly endeavor to build, maintain, and scale analytics. Hence, why data and analytics PaaS are the fastest growing cloud opportunity as mentioned in my first point above.
McKinsey and other analysts believe the reason why SaaS companies fail with their investments in analytics is that meeting these needs requires design talent and development capabilities that are not typically found in analytics departments or elsewhere in the company. Instead, what’s required is a spectrum of tools and access to experienced data product managers to help design and get the most out of your analytics investments.
In addition, when you are making the decision to invest time and effort into analytics, data collection and transformation are not the only challenges. The adoption of analytics, as well as how to gain value from investments, has been a struggle for even bleeding-edge SaaS companies who are investing heavily in machine learning technology.
One of the leading reasons for the low adoption of analytics is because businesses are embedding traditional or “old-school” BI tools. The future of analytics is about designing extremely user-friendly and customized experiences for every business user making decisions. Front-line workers like store managers need intuitive and interactive dashboards with recommendation engines that tell them what to do, not bloated, hard-to-understand BI dashboards. If you want to drive adoption of analytics, you need to think through and satisfy the distinct needs of each type of user, which traditional BI just can’t do.
3. Leverage the power of DevOps
It's not just analytics and machine learning that are catalysts for SaaS companies moving to the cloud. According to the LogicMonitor Future of the cloud survey, IT agility and excelling at DevOps will become a driving force.
LogicMonitor is not the only research group spotting this trend. IDG’s Cloud Computing research shows that improving the speed of delivery in IT and achieving greater flexibility to react to changing market conditions are two of the biggest focus areas for companies. This means SaaS companies are putting higher pressure on IT departments to deliver cloud apps and platform components at a much faster rate of delivery, and, in turn, they’re adopting DevOps to meet those needs.
Growing DevOps teams are being used for faster application development and database management. According to Puppet’s DevOps report, companies who are adopting DevOps are able to deploy new and higher quality applications and services faster than their peers, and they’re able to realize improved outcomes in efficiency, profit, and customer satisfaction. Furthermore, Google’s Dora report shows that DevOps are adopting cloud PaaS to accelerate and improve their workflows, and that DevOps teams who adopt PaaS are 1.5 times more likely to have higher performance and efficiencies, helping the business reach its goals faster.
Remember what I said earlier about PaaS and data and analytics? Each of these trends are intricately linked.
Understanding and connecting the dots among these trends is critical. If you are able to connect the dots and apply it to your SaaS product, it gives you the ability to accelerate your growth.
4. Low code/no code, developers are important!
DevOps is not the only interesting trend related to developers. Another interesting trend that is being talked about is Low Code/No Code. It even came up at the 2019 SaaStr conference as a big topic.
“Low code” allows developers the ability to streamline the application development process using little or no hand-coding, and “no code” refers to business users who are able to use “building blocks” to build functional but generally limited apps without having to write a line of code. With pressures on IT to quickly react to change and increased demand for faster application delivery, the "low-code / no-code" revolution is growing. The State of Application Development Report has posed the question “Is IT ready for disruption?” Low-code solutions will give DevOps the ability to produce quality applications and easily and efficiently make changes as business needs change, instead of having to rely on time-consuming hand coding.
Let's go back a step.
Even if PaaS platforms, specifically data and analytics platforms, are on the rise and analytics and machine learning are the leading reason for new technology purchases, SaaS companies will fail with their investments in analytics because analytic experiences need to be extremely user-friendly and customized for every business. As such, low-code solutions like prebuilt components and reusable metrics are a great way to solve this problem.
Connecting this trend with IT’s need for agility and DevOps’s adoption of platforms to enable faster delivery of new customized experiences for your customers can help lead to growth in customers and revenue. This takes me to the last trend: growth hacking.
5. Growth hack: get scrappy in order to scale
As a SaaS company, the ultimate goal is to drive growth. The term “growth hacking” refers to getting as many users as possible using your platform and finding new ways to generate revenue. Typically, revenue growth is about growing paid users or customers from your product. Ideally, you want to acquire them with minimal resources. There are many strategies on how to do this.
One way to do this is through data. Remember the second trend: get analytics and machine learning on your roadmap. Your application, company, and business network generate tons of data. This data can be turned into insights valuable enough to grow user adoption and revenue through a freemium version, new product tier, “a la Carte,” subscriptions, or free trial to attract new users.
Building successful revenue models are not done in a vacuum. If you look at high-performing companies like Twilio or Zendesk, they used embedded analytics as an additional way to hack growth and increase revenue.
Let's summarize these trends and why they matter for SaaS companies:
- Cloud is the new on-prem, so what's driving cloud adoption? IT agility. SaaS companies need to quickly respond to changing market demands and technology and are putting more pressure on IT.
- Higher pressure on IT departments to deliver new functionality and innovation at a much faster rate of delivery is driving the need to implement DevOps processes.
- DevOps teams are adopting cloud PaaS to accelerate and improve their workflows, to deploy new and higher quality applications and services faster, and enable the business to realize improved outcomes in efficiency, profit, and customer satisfaction.
- Analytics and machine learning are the fastest growing platforms and leading factor for new technology purchases for IT/DevOps. It's challenging, costly and time consuming to build analytic solutions in-house, but its essential for success at improving the customer experience and driving product growth.
- Low-code/no-code solutions are allowing DevOps to quickly deliver highly customized experiences and get to market faster with new innovations, helping fuel SaaS growth.
- New growth hacking approaches like leveraging analytics within SaaS solutions give SaaS companies another way to build revenue and scale faster.
...As I said in the beginning, my prediction: Get these trends right as a product company, and you will amplify your growth.
Written by GoodData Author |