Published on February 5th, 2016 | by Diogo Costa

Insights from the SaaS Industry in 2015

Software as a Service (SaaS) is a concept that exists for a few years now, but only recently people started to call it this way. The proliferation of fast Internet has enriched all kind of websites and, along with this revolution, came the web applications. Therefore, it can be said that the concept of SaaS is the availability of applications on the web, that require no local installation.

SaaS is more popular and close than most people think – the first major example of SaaS is email services. Gmail or Outlook are nothing more than web versions of those old email clients, like Microsoft Outlook. More and more services are beginning to emerge built in this architecture.

Given the rise in its popularity, it is important to know the details and trends related to SaaS in order to understand the best way to take the greatest possible advantage of it. Luckily, Totango has been doing this job since 2011, by surveying professionals from SaaS companies, from startups to large and established businesses.

The survey from 2015 has recently been made public, and it brought up some interesting conclusions and insights, which can be used for professionals to develop their own strategy to measure and monitor their businesses in this new year. Here are the six most important insights:

The SaaS industry continues to be a challenged by high churn rates
Upsell and expansion sales are a missed opportunity for SaaS vendors
SaaS company growth rates are strongly influenced by customer retention and upsell
Customer retention cost, customer health, and customer lifetime value are the new frontier in SaaS metrics
Spending on customer retention is growing

In order to better understand what they mean, the best thing to do is to analyze the full report in detail, as it brings invaluable advice for professionals to design their strategy better.

Tags: market, SaaS, software, totango