It's undeniable that software as a service (or SaaS) is growing rapidly. In fact, based on a survey conducted by BetterCloud, 73% of organizations who responded said that at least 80% of their apps will be SaaS by 2020. That's a percentage that's expected to grow past 2020, too.
In this post, let's explore what a SaaS company is, what it sells, and how to follow its business model. Then, we'll look at the top SaaS companies that have been successful using this approach.
But, first let's provide a table of contents so you can locate information faster.
Table of Contents:
- What is a SaaS company?
- How to follow the SaaS business model
- SaaS Products
- B2B SaaS
- Top SaaS Companies
What is a SaaS company?
Saas companies are organizations that use software to provide customers with a service. These businesses create, develop, host, and update the product all from one central location. SaaS businesses have immediate access to an unrestricted global market and can grow without raising product delivery costs.
SaaS is changing the way organizations work. SaaS products distribute data online to be accessible from a browser on any device. Companies can then continue to host the software and provide constant IT support. This allows for stronger network security, greater collaboration, additional features, and straight-forward, upfront prices.
How to Follow the SaaS Business Model
SaaS businesses are built in three phases: setup, growth, and stabilization. Let's take a look at each stage in the sections below.
Setup
The setup phase is where you'll build a foundation for your business. This is where you'll create your product and plan the campaign you'll use to bring it to market. This is also an ideal time to identify your target audience, create an effective marketing and sales strategy, and consider your options for customer support.
Growth
After your product reaches the market, you'll (hopefully) experience a great deal of growth. New customers will quickly adopt your product, creating a sudden demand for your marketing, sales, and customer service teams. Your business will need to act quickly to capitalize on this timely opportunity to secure a loyal customer base.
Fortunately, this growth will accompained by additional revenue as well. By reinvesting this capital back into your product and services, you'll have the resources needed to meet your current user demands. And, this will generate more money as you continue to acquire and retain more customers.
Stabilization
At this point, your business continues to attain new customers, but you aren't feeling as pressed to keep up with their needs as you were in the past. That's because you've wisely reinvested into customer service software, marketing automation, and product updates. These tools help you keep pace with customer demand and create a delightful user experience.
Now that we've explained the SaaS model, let's review SaaS products.
SaaS Products
SaaS products are software products that are hosted by a central provider and offered to customers through the internet. Rather than having to install or download a copy of the application, users can access the product from a web or mobile browser. The product's provider then manages and updates the software based on user needs.
Since their products help businesses achieve goals, B2B SaaS companies are deeply invested in customer success. When customers succeed, they're more likely to remain loyal to the SaaS business. This fosters mutual growth between the company and its customers.
Some SaaS companies have stood out from the crowd this year — which is a tough feat to accomplish in their respective markets. To give you an idea of what these organizations look like, we've curated a list of the strongest, fastest-growing, and biggest SaaS companies that you can learn from in 2019.
Strongest SaaS Companies and Products
This data was collected by G2 Crowd. G2 Crowd uses Grid® Scoring Technology, which establishes its scores of top companies and products on a scale of 0-100 based on user reviews, online sources, and social networks. You can read more about the Grid® Scoring Technology here.
1. Google
Google owns 137 products that are focused on Internet-related services, like its search engine, digital analytics, document creation, online advertising, and more. According to G2, it was ranked 92 in market presence and 94 in satisfaction with an overall score of 93.
Type of SaaS Company: B2B, B2C
2. Adobe
Adobe owns over 50 computer software products in digital media and marketing, printing, and publishing. In this report, it was ranked 86 in market presence and 92 in satisfaction with an overall score of 91.
Type of SaaS Company: B2B, B2C
3. Slack
Slack owns three products. Its main product, Slack, is a collaboration and chat tool that allows for internal messaging, video conferencing, and productivity bots. It was ranked 85 in market presence and 100 in satisfaction with an overall score of 94.
Type of SaaS Company: B2B
4. MailChimp
MailChimp is a marketing software company that owns three major products. Its main product, MailChimp, is an email marketing platform that allows you to schedule automated emails and track their results. This product was ranked 85 in market presence and 99 in satisfaction with an overall score of 94.
Type of SaaS Company: B2B, B2C
5. Shopify
Shopify is an ecommerce business that owns four products. Its main product, Shopify, is an ecommerce platform for online stores and retail POS. Shopify was ranked 87 in market presence and 99 in satisfaction with an overall score of 94.
Type of SaaS Company: B2C
6. Microsoft
Microsoft owns over 100 different cloud products that are used in a variety of different software. The software giant was ranked 89 in market presence and 98 in satisfaction with an overall score of 94.
Type of SaaS Company: B2B, B2C
7. SurveyMonkey
SurveyMonkey is an online survey developer tool that allows helps with data analysis and representation. It was ranked 64 in market presence and 100 in satisfaction with an overall score of 91.
Type of SaaS Company: B2B, B2C
8. MathWorks
MathWorks is a mathematical computing software that's used by product developers and engineers. The company owns four products. Its main one, MATLAB, was ranked 85 in market presence and 99 in satisfaction with an overall score of 93.
Type of SaaS Company: B2B
9. HubSpot
HubSpot is an inbound marketing software company with tools focused on CRM, social media marketing, content management, web analytics, and SEO. It was ranked 74 in market presence and 95 in satisfaction with an overall score of 90.
Type of SaaS Company: B2B, B2C
10. Piesync
Piesync is an application that automates data-entry so business can quickly transfer data between apps. It was ranked 48 in market presence and 91 in satisfaction with an overall score of 69.
Type of SaaS Company: B2B
Fastest-Growing SaaS Companies & Products
This data was collected by the cloud service provider, Okta. The data is based on the growth rate of these SaaS company's products over the course of the last 12 months. Okta creates their Businesses @ Work reports by analyzing customer data in a number of categories. You can read more about the Business @ Work reports here.
1. KnowBe4
KnowBe4 provides Security Awareness Training to help educate users on solving IT security problems related to spear phishing, engineering, and ransomware attacks. KnowBe4 experienced a 178% growth during the 12-month observation period.
Type of SaaS Company: B2B
2. LastPass
LastPass is a password management software that stores passwords for users in case they forget them. LastPass experience a 132% growth during the last 12 months.
Type of SaaS Company: B2B, B2C
3. Proofpoint
Proofpoint is a cybersecurity company that helps businesses protect their campaigns and data. During the last year, Proofpoint experienced a 122% growth.
Type of SaaS Company: B2B
4. Jamf
Jamf provides simplified IT solutions for Apple device management. The company experienced a 120% growth over the 12-month period.
Type of SaaS Company: B2B
5. Zoom
Zoom provides video conferencing tools for hosting remote meetings. The report lists that it experienced a 107% growth.
Type of SaaS Company: B2B
6. Atlassian
Atlassian is a software development company that's best known for its ticketing system, JIRA, which tracks internal issues occurring within the organization. Atlassian saw a 91% growth during the observation period.
Type of SaaS Company: B2B
7. Freshservice
Freshservice is a customer service branch of Freshworks. It offers help desk software that assists customer service teams with their daily functions. Freshservice experienced a 78% growth over the last 12 months.
Type of SaaS Company: B2B
8. Ring Central
Ring Central is a communications provider that offers messaging and video solutions that help businesses communicate internally. It experienced a 73% growth over the 12-month period.
Type of SaaS Company: B2B
9. Teem
Teem is a room-booking software that makes it easier for businesses to schedule and plan conferences within their offices. The report shows that Teem saw a 73% growth over the last year.
Type of SaaS Company: B2B
10. Sophos
Sophos provides both security software and hardware that assists with mobile and network security, encryption, threat management, and more. Sophos experienced a 42% growth in the 12-month period.
Type of SaaS Company: B2B, B2C
Biggest SaaS Companies
This data was collected by Statistia. Statistia based this data on the market capitalization of each SaaS company. You can read more about The SaaS Report here.
1. Salesforce
Salesforce owns 58 cloud-computing products that help employees collaborate with their customers. The market capitalization for Salesforce is $117.8 billion.
Typ of SaaS Company: B2B
2. ServiceNow
ServiceNow provides enterprise automation solutions for streamlining work and conversations across an entire organization. The market capitalization for ServiceNow is $50.9 billion.
Type of SaaS Company: B2B
3. Workday
Workday is a tool that human resources team use for financial management and human capital management. The market capitalization for workday is $46.5 billion.
Type of SaaS Company: B2B
4. Atlassian Corporation
Atlassian provides products, such as Jira and Confluence, that improve software development, team collaboration, project management, and code quality. The market capitalization of Atlassian Corporation is $31.5 billion.
Type of SaaS Company: B2B
5. Square
Square is a credit card processing app that lets businesses easily accept credit payments without a cash register. User buy the Square product, plug it into their phone, computer, or tablet, and their device immediately transform into a credit card processor. The market capitalization for Square is $31.4 billion.
Type of SaaS Company: B2B
6. Veeva
Veeva offers cloud solutions for applications in the pharmaceutical and global life sciences industries. The market capitalization of Veeva Systems is $18.6 billion.
Type of SaaS Company: B2B
7. Splunk
Splunk provides software solutions for searching for, monitoring, analyzing, and interpret machine-generated big data. The market capitalization of Splunk is $18.9 billion.
Type of Saas Company: B2B
8. Twilio
Twilio connects people by providing business with tools that can use to communicate with internal and external stakeholders. The market capitalization of Twilio is $16 billion.
Type of SaaS Company: B2B
9. Okta
Okta offers a software that integrates applications into one interface. This makes each app accessible through one secure location. The market capitalizaiton of Okata is $14.1 billion.
Type of SaaS Company: B2B
10. Paycom
Paycom is a software provider that helps businesses manage and optimize their payroll operations. It's market capitalization is $13 billion.
Type of SaaS Company: B2B
Top B2C SaaS Companies
This data was collected by Mike Sonders. It measures the largest public SaaS companies based on market capitalization as of February 2019. Since there's no exclusive list of B2C SaaS companies, we went ahead and filtered the this list to fit our specifications.
1. Dropbox
Dropbox is a cloud-based storage solution for documents and data. The company owns four products and collectively it's worth $9.74 billion.
Type of SaaS Company: B2B, B2C
2. Elastic NV
Elastic NV is a data analytics platform that helps users explore their data differently by using a search feature. Its market capitalization is $6.45 billion.
Type of SaaS Company: B2B, B2C
3. athenahealth
athenahealth is a healthcare provider that uses online services to provide insights to its customers. The market capitalization of athenahealth is $5.55 billion.
Type of SaaS Company: B2B, B2C
4. Wix
Wix is a website creation tool that's marketed toward users with little or no web-development experience. It's market capitalization is $5.34 billion.
Type of SaaS Company: B2B, B2C
5. CarGurus
CarGurus is a SaaS company that helps customers buy and sell new and used cars. The market capitalization of CarGurus is $4.7 billion.
Type of SaaS Company: B2C
6. Pluralsight
Pluralsight is an online education platform that analyzes different career skills and provides courses that teach customers how to use technology based on their assessment scores. It's market capitalization is $4.46 billion.
Type of SaaS Company: B2B, B2C
These companies set the precedent for what a successful SaaS business should look like. By studying the achievements of these companies, aspiring businesses can set specific goals to strive towards for 2019 and beyond.
For more information about SaaS businesses read about the difference between IaaS, PaaS, and SaaS.
Originally published Jan 3, 2020 12:09:00 PM, updated January 03 2020
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