SaaS delivering digital automation for US SMBs and Midmarket – forecast to spend USD26B in 2019

Techaisle’s US SMB and Midmarket SaaS adoption trend data shows that 73 percent of small businesses (1-99 employees) and 97 percent of midmarket firms (100-999 employees) are using one or more SaaS application categories. 37 percent of SMBs (1-999 employees) are using < 5 SaaS categories, however, 28 percent are using more than 10 SaaS categories (driven by midmarket firms). Overall 72 percent of SMBs are currently using 10 or less SaaS application categories but planned adoption indicates there is room to grow for the SaaS market within the SMB segment. The pace of SaaS automation is being governed by business & IT challenges, security posture, deployment and integration capability and point of purchase. Initial SaaS adoption has been for non-core business processes; however, 57 percent of mature adopters are using SaaS for core business processes. Techaisle survey data also shows that 64 percent of SMBs are using collaboration-focused SaaS solutions and 60 percent finance focused, however, future plans indicate that 62 percent will use customer-focused SaaS solutions.

As per Techaisle, US SMB and midmarket firms are forecast to spend US$25.6 billion on SaaS solutions in 2019.

SaaS is enabling SMB business management to clearly connect technology capabilities to business priorities and deliver digital automation. It is providing a compelling response to a wide range of SMB business issues. One of the top five business issues is increasing growth. In a digital economy, with SaaS, SMBs are able to expand reach and engagement with customers and prospects, while also locating and integrating with suppliers to improve scale-out options. Survey data illustrates that SMBs are prioritizing growth and in the digital world, growth is more than simply increasing the top line. It also includes the ability to reach into new markets, to identify and capitalize on adjacencies, to identify and integrate with suppliers who can extend their firm’s relevance in new ways. Growth is important to both expansion and to maintaining viability in a world where competitors arrive daily, and/or from innovators using technology to disrupt existing industry structures.

One of the major reasons why SaaS is seen as a fit for SMBs is that the “as-a-Service” delivery model offloads requirements from IT staff to the supplier. This is not to say that SaaS use does not impact IT staff requirements: the need to integrate and secure systems and to manage data that is used by multiple applications adds tremendously to the complexity of IT operations. SaaS does, however, reduce the total number of cycles consumed by operations, both by aligning resources with requirement and by offloading repetitive, low-value tasks.

Businesses in general, and SMBs in particular, have a large number of poorly-automated or un-automated tasks and processes which could be meaningfully improved by the use of focused, low/variable cost SaaS applications. The upside for SMBs is that cloud is the agility platform for businesses today and SaaS offers a zero-friction option for automating for new processes.