Innovation is the heartbeat of the technology industry, a relentless pursuit to deliver greater value and meet evolving customer needs.
In information technology, hardware innovations paved the way, providing the computational power needed for software development. However, the coupling of hardware and software limited customization, time to distribute, cost of delivery, and customer experience. With the introduction of the Operating System (OS), software became independent of hardware. This not only tackled distribution challenges but also fueled innovation in the software industry, giving rise to various applications like Oracle databases, the Microsoft Office Suite, Adobe Photoshop, and SAP ERP.
It still used to take many years to go from one major OS version to another. As a result, vendors started decoupling application software from the underlying operating system. We saw new applications begin to appear, and software vendors started distributing their software through various licensing models, including open-source.
Despite rapid proliferation and innovation in software technologies, different stacks continued to evolve with different operating systems, databases, and infrastructure components with no standardization across them. The average application tech stack became complicated to provision and operate, and customers were looking for easier, faster, customizable (different layers from different vendors), fully-managed solutions. This led to the birth of SaaS.
Software as a Service (SaaS) is a way of using software or computer programs without needing to download or own them. Instead of buying and installing the software on your computer, one could access and use it over the internet. It's like using an app on your phone or watching videos online without having to save them on your device. With SaaS, you can log in and use the software through a web browser, paying for it based on how much you use it, like a subscription or some usage-based model. From AI applications like Private ChatGPT, infrastructure like Snowflake, content management like WordPress, HRMS like Workday, customer support like Zendesk, customer engagement platform like Salesforce to collaboration solutions like Zoom, Slack, and Google Workspace, we are surrounded by SaaS applications, and more are emerging each day.
We believe that SaaS goes beyond convenience; it has the potential to drastically reduce the time and cost associated with delivering value. From the vendor perspective as well, SaaS allows them to distribute their software quickly, reduce sales cycles, get quicker feedback to accelerate the innovation cycle, and take advantage of economies of scale. The rise of AI will further accelerate the innovation cycles with intelligent services, and the need to deliver software updates at scale in a secure and managed way will be more critical than ever.
According to the McKinsey report, SaaS is projected to become a multi-trillion-dollar industry by 2030. However, currently, two-thirds of the software remains non-SaaS, and even within the SaaS sector, there is room for improvement in many instances. This lack of surprise is understandable, as, until now, there hasn't been a vendor specializing in building and operating SaaS.
In the foreseeable future, SaaS is expected to permeate every industry vertical, becoming the de facto standard for software delivery. As we navigate this transformative journey, one thing is certain: SaaS is not just a technological evolution; it's a catalyst for unprecedented innovation, reshaping the digital landscape for generations to come.