3 Trends Influencing Businesses SaaS Adoption in 2023

SaaS tools and platforms are important to organizational IT goals, delivering results with flexibility and agility. However, their use is not immune to wider economic or corporate trends.

According to Snow Software research, as the year came to a close, more than two in five IT executives had issues with employees who installed new SaaS applications without informing IT. Other top concerns for two in five IT leaders were limiting the number of duplicate SaaS apps and discovering configuration errors.

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As organizations continue to modernize processes and seek efficiency, visibility, and cost minimization, SaaS adoption is projected to grow across operational systems.

As inflation reached record levels in 2022, enterprise clients and SaaS providers were concerned about a deteriorating economy and decreasing purchasing power. This past year, the push and pull between the two characters were on show during earnings calls and layoff announcements.

Despite the hurdles, SaaS expenditure is not likely to slow, but organizations will be cautious in their purchases. In a saturated market, vendors will feel pressure to maintain revenues.

Here are three trends that will influence business SaaS adoption in 2023:

An Increased Emphasis on SaaS Asset Management

Enterprises will try to strengthen SaaS governance in 2023. Aside from managing application sprawl, an economic recession creates an atmosphere in which enterprises must be cautious about spending, even if budgets are not threatened.

However, taking action might be tough, according to Gartner senior director analyst Stephen White. IT executives must raise their visibility throughout their SaaS portfolio.

According to Snow Software statistics, when examining the most difficult components of SaaS application administration, IT directors were most concerned about shadow IT, security, configuration difficulties, and duplicate apps.

An Increase in Premium Tiers

Vendors will face pressure to maintain revenues as enterprises evaluate their SaaS portfolios rigorously. According to Info-Tech Research Group’s research director of infrastructure and operations, John Annand, SaaS suppliers will splice off features and add the tools to premium packages.

As per Gartner forecasts, the combined effect of inflation, competitive labor markets, and environmental sustainability regulations will result in 15% to 20% higher SaaS prices by 2025. In 2022, major software suppliers such as Slack and Microsoft raised product prices.

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Transitioning Operational Systems to SaaS

The use of SaaS has skyrocketed, supporting many mission-critical activities. According to Liz Herbert, VP principal analyst at Forrester, SaaS adoption will grow to operational systems by 2023.

“We anticipate that 2023 will be a year of further modernization, particularly in the lagging back-office and operational areas,” Herbert said. Many clients have previously delayed migrating operational systems to SaaS owing to a mix of competing priorities and the lesser maturity of SaaS products in certain areas.

According to Herbert, while industries like as customer relationship management software, HR, and collaboration are significantly saturated with as-a-service products, SaaS choices in other areas such as ERP, supply chain management, and manufacturing have expanded.

“We see a lot of client projects focussing on converting legacy systems to new SaaS ones, in particular in these operational and back-office areas,” Herbert concluded.

According to Gartner, 30% of enterprises will rely completely on SaaS apps for mission-critical activities by 2025.

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