2016 was a tumultuous year in terms of world events, with the effect of Brexit and Donald Trump’s victory reaching as far as the cloud computing world. Away from the chaos, there were some fascinating new innovations and major fails in the technology world. Samsung made phones that set on fire (not on purpose), Yahoo was hacked in a big way, Twitter pulled the plug on Vine, Tesla took a major step towards driverless cars, and Facebook continued its world domination, but was called to task over its news algorithms with its “fake news”.
The SaaS software industry also saw a year filled with new product releases, major software updates, and significant acquisitions. Here we run down the top new cloud software trends 2016 has thrown up:
New SaaS product: Freshsales
Customer service software company Freshdesk got into the CRM market in 2016 with the release of Freshsales. A brave move in what is already a crowded market, the company said that it decided to release a new CRM because it couldn’t find a reasonably priced product (for a small business) that included the ability to update customer contact details using APIs and sync them with the CRM, event tracking for free trial signups, sales automation, and integrated email and phone.
Freshdesk brings all of this together in Freshsales CRM, with lead and deal management and mobile apps, all at what it says is an affordable prices for small businesses. The product has been warmly received so far, and Freshsales scores an average rating of 4.6/5 stars from GetApp users at the time of writing.
Most significant product update: Zenefits Z2
Zenefits has had a rollercoaster of a ride since its launch in April 2013. It all started out well: the company expanded from 15 to 1,600 employees in three years and raised $580 million in venture capital funding. In 2015 it was valued at $4.5 billion.
In 2016 it all started to go wrong, with layoffs, major resignations, scandals, and an investigation into business practices. To try and combat the slew of bad press, the company carried out a major overhaul of its product with the Zenefits Z2 release.
New features include built-in payroll functionality, and a third-party app store that enables native integrations with products such as Salesforce and QuickBooks. Zenefits Z2 also includes a new paid service called HR Advisor, which aims to help small businesses with limited HR resources, more transparency when choosing benefit plans, and new employee-facing mobile apps.
SaaS acquisition: Oracle buys NetSuite
Software giant Oracle finalized its acquisition of cloud-based business management platform NetSuite in November 2016 for a whopping $9.3 billion. The deal is designed to help Oracle expand its presence into smaller companies and to push further into the cloud. Analysts expect there may be integration difficulties ahead, and some uncertainty following the departure of key sales leaders.
An honorable mention goes to Microsoft’s $26 billion acquisition of LinkedIn (it’s hard to ignore a buyout of this magnitude). Concerns were raised regarding the company’s continued commitment to providing other social networks with access to Outlook, but this looks to have been resolved.
Sebastien Bonnier, relationship manager at LinkedIn, explains the significance of this acquisition:
“The merging of the LinkedIn Economic Graph with the MSFT graph will revolutionize the way we connect, work and learn. The execution on the delivery of value to customers of the benefits of this integration will be made possible by the new model of software-as-a-service that would not have been possible in the old legacy world of on-premise.”
Fastest growing cloud company: OpenText
In 2016, research firm PwC released a cloud-specific ranking for the first time, with Canadian company OpenText heading the list. The enterprise information management software company saw its cloud revenue grow almost 800 percent from 2013 to 2014.
While OpenText caters for enterprises, there were entrants in the top ten that serve small business. MicroStrategy provides business intelligence solutions to small companies, while IT management solution New Relic also caters for smaller businesses. The two companies saw cloud revenue growth of 98.6 percent and 82.2 percent respectively.
Top rated SaaS company: Slack
It’s been a crazy few years for collaboration app Slack, which now has more than four million daily active users and more than 1.25 million paid users. It topped the list of the inaugural Forbes Cloud 100 for 2016. The list combines data including financial health and growth with factors such as unprecedented customer adoption and satisfaction.
However things aren’t all rosy for Slack, as its growth has started to slow down, and it faces yet more competition in the market, with the release of Facebook’s Workplace and Microsoft Teams, which led the company to pen a rather bizarre blog post congratulating Microsoft on the release of the new collaboration product.
One to watch in 2017: Datadog
Datadog – which has been described as “like crack for developers” – made waves in the IT management market in 2016. It was picked as a startup to watch in 2016 by venture capitalists, ranked as one of the top ten fastest growing companies in North America by Deloitte, and the company’s new APM tool was featured by the likes of Forbes as a direct competitor to arch rival New Relic.
In what can be a very technical and dry market, Datadog is trying to appeal more to non-technical business owners by showing its fun side and profiling interesting ways people have used its infrastructure monitoring platform.
View from the industry: SaaS software trends 2016
We asked industry insiders to share their highlights and top SaaS trends were for 2016. Here are their thoughts:
SaaS turning into PaaS! With thousands of new products on the market, many many industries (including customer support, online sales, healthcare, and productivity) became extremely competitive. That forced established SaaS companies to provide an additional value to their customers in order to keep the customer retention ratio high. What many of them focused on in 2016 was the creation of platform-as-a-service (PaaS) capabilities, allowing customers to create and distribute add-on apps for their major product.
The rise of self-service tools. In 2016 consumers were given more and more tools to handle easy-to-resolve cases themselves. So-called self-service solutions (online communities of engaged customers and knowledge bases) were developed rapidly to provide consistent and personalized customer support and answer consumers’ empowerment demands. Companies finally seem to understand that an investment in self-service tools can bring them significant ROI in form of enhanced customer support and higher customer retention ratio.
David Ferguson, Founder of 5000fish, Inc. and OakTree Enterprise Solutions:
Everybody is out there building bots, and bot-building tools. Right now they are pretty basic and trivial, but I think you had a few really cool starts in that area.
Drift released a bot that can query knowledge bases for an initial chat question or route the incoming person to the right live person or collect an email for offline communication.
Darhmesh Shah at HubSpot did a pet project to make GrowthBot, a bot which was built in Facebook Messenger and is now part of the HubSpot phone app. This bot can take a wide variety of questions and return data. It’s pretty nifty. So 2016 was the beginning of the bot trend, let’s just hope it doesn’t bring forth the Terminator or Matrix style takeover.
Rick Chapman, Author of SaaS Entrepreneur:
There are two major trends that I saw shaping the SaaS industry in 2016. The first is the continuing move towards device independence and the looming technology battle that will erupt for dominance of the portable workspace and the technology stacks that will support this.The second is the setting sun on the first age of social networks.
Tim Schukar, Customer Success Consultant at Digital Disruption Group:
While not necessarily completely developed in 2016, the traction around machine learning and the associated libraries is one of the most important changes for SaaS and software in general. Everyone “knows” big-data, but very few know how to leverage or even understand all of that data.
Machine learning will allow companies to make insightful decisions as well as allow SaaS to run smarter through the use of machine learning.
What are your picks for the best apps and software trends for 2016?
That’s our pick of some of the top business apps and software trends for 2016, but now it’s over to you. What have your highlights been from the SaaS world over the past year? Let us know in the comments below or contact me on Twitter. Oh, and be sure to sign up for the free GetApp newsletter and we’ll keep you up-to-date with all of the business software trends in 2017!