Blissfully’s 2020 SaaS Trends Report, Part 2— SaaS Spending and Breakdown by Department
📖 Introduction: About this Report
At Blissfully, we’re focused on the ways companies use software-as-a-service (SaaS) to power business productivity, growth, and success. Each year, we release Blissfully SaaS Trends Reports based on proprietary data from thousands of companies around the world.
At Blissfully, we’re focused on the ways companies use software-as-a-service (SaaS) to power business productivity, growth, and success. Each year, we release Blissfully SaaS Trends Reports based on proprietary data from thousands of companies around the world.Small Business, Mid-Market, and Enterprise.
See Part 1 of this report for more.
SaaS Spending by Department
🌎 ALL Departments Run on SaaS
SaaS Decentralization Continues
In an earlier era of business, centralized IT departments selected technology for the whole organization. Those days are long gone, and we have previously written about the trend towards Collaborative IT.
SaaS apps have been a great equalizer in tech access within companies. People outside of IT are now able to select and adopt the products they want and need. Employees and departments love being able to move quickly, find what works best for them, and feel empowered to do their best work. On the flip side, this can create a headache for IT departments, who have lost centralized control over what technology is being used, and who may be facing “shadow IT” issues.
Regardless, we see the trend of decentralized SaaS continuing in 2020. For mid-market companies, the number of billing owners per company has increased from 12 in 2019 to 21 in our 2020 report, demonstrating that more and more people-often outside the IT department are involved in selecting and managing SaaS apps.
Some SaaS Categories are Growing Faster than Others
Going hand-in-hand with SaaS decentralization is the widespread use of apps across all departments. If you look at any modern organization, every department uses SaaS products extensively. However, some departments are growing faster than others when it comes to app use.
The number of apps in usage has grown overall but at different rates. Some of the more mature categories, like sales, which was an early entrant into SaaS with Salesforce and CRM in general, is the slowest growing app category. On the other extreme is IT & Security apps, which are growing at nearly 100% over the last two years. This is not too surprising as security moves to the cloud and creates new use cases, plus the explosion in privacy regulation by GDPR, CCPA, and others, creating new security and compliance needs.
💼 Business Ops
Across SMBs to enterprise organizations, G Suite and Slack are the top SaaS apps in usage for business operations, both in terms of market share and spending. These are relatively mature players in the field, and will continue to dominate. Zoom, Calendly and Looker are leaders in the Business Operations department, though they are less entrenched than G Suite and Slack. We see Adobe, Box, and PandaDocs, among others, with strong potential to make gains moving forward.
In Sales, SalesForce and Hubspot are the most popular SaaS apps, both in terms of usage and spending. Hubspot is the most popular SaaS product for small businesses, but Salesforce is preferred across mid-market and enterprise organizations. LeanData, DiscoverOrg and others, while not as highly-ranked, are mature and hold their place in the pack. We see potential growth for Yesware and Salesforce.
😃 Customer Support
SaaS app popularity in Customer Support departments varies depending on the company’s size. Atlassian is popular on either end of the spectrum, winning the small business and enterprise tiers, while mid-market companies prefer Zendesk. While Atlassian is the top app overall for market share, it comes in third place for share of spending — when it comes to money on the table, Zendesk occupies the top spot. We see Zendesk, Intercom, and others in the upper-right quadrant as leaders, and Qualtrics and Solvy as mature and established players. Atlassian has the most potential to grow in Customer Support departments.
SaaS-forward Engineering departments have a clear preference — GitHub has the largest share of the market. However, Twilio took the top spot for spending, marking it out as a mature technology in our analysis. SendGrid was in third place, both for market and spending share in Engineering departments. We see SendGrid, CircleCI, and others as leaders, while IntelliJ Idea, BrowserStack, and Docker have strong potential to grow both market and spending share.
MailChimp, SEMrush, and Canva are the top three apps for market share, while Marketo, Capterra and Clearbit have the highest share of spending. Meltwater and others are mature in the market, while MixMax, Canva, Clearbit and others have high potential.
PagerDuty, Sentry, and Namecheap are the top three SaaS apps for DevOps in terms of market share, while DataDog, CloudFlare and Sumo Logic dominate spending. We see Snowflake, MongoDB, and others are mature in the DevOps department. Namecheap, DigitalOcean and Elastic have potential to grow.
The top SaaS apps for market share in product management and development are Typeform, Adobe Creative Cloud, and Sketch. When it comes to share of spending, Adobe Creative Cloud takes the lead, followed by Authenticom and FullStory. This makes Adobe Creative Cloud the clear leader, while players like Figma, Abstract, inVision, and others have high potential.
🔒 IT & Security
Parallels is the top SaaS app in terms of market share for IT and Security departments, which may be a reflection on the Windows vs. Mac problem in organizations, with Parallels providing a solution. It is followed by Solarwinds and KnowBe4 for market share. However, in terms of spending share, KnowBe4 comes in first place, followed by Fleetsmith and Code42. In our analysis, we see SolarWinds, Fleetsmith, and others as leaders, while Cisco, OneTrust, Splunk, and others have reached maturity. Players like Code42 and Sequr have high potential for IT and security usage.
HR departments lean on LinkedIn, Gusto, and BambooHR, lifting those apps’ market share, but LinkedIn comes in third place for spending share-HR juggernaut ADP is the top company for spending, followed by Namely and then LinkedIn. We see Namely, Freshworks and others as mature tools, while LinkedIn, Gusto, and others are leaders. TreeHouse, Workable, and Pingboard have room to grow as high potential SaaS apps.
In the Finance department, two apps take the top two places for both spending and market share: bill.com and Avalara. Recurly comes in fifth place for both spending and market share. Needless to say, Bill.com and Avalara are the leaders in our analysis, but QuickBooks is making its way toward this category, too. Expensify is nudging toward becoming a leader, while Xero, BareMetrics, and Sift Science are high-potential apps moving forward.
Complete Chart Breakouts
Download the complete report here and see the Top 25 apps across each category!
Additional Takeaways for Departments
As the graphs above show, there is variation between the popularity of apps versus which apps see the most spend. Sometimes the most used SaaS app also garners the most money spent, but in several cases above, the top-grossing app doesn’t necessarily have the most market share. This is likely because certain apps cost more than others, and companies use them to different extents.
While we do see consolidation in the world of SaaS, it’s also true that there’s room for many different approaches to the problems that businesses face at varying growth points, sizes and maturity levels. Our analysis showed this across departments-in each category, there are a number of high-potential SaaS players nipping on the heels of the established leaders.
Small Business, Mid-Market, and Enterprise
It’s worth noting that, as companies get bigger, they tend to use more total apps. However, they actually tend to use fewer unique apps per person. This may reflect an increasing reliance on centralized IT and governance-as businesses grow, they may tighten up various policies and procedures, and they have more room to hire IT professionals in-house. Increased monitoring and centralization of SaaS subscriptions determines what apps are available for use by employees. Let’s examine the data in more detail.
For this report, we define companies by size as small business, mid-market, or enterprise. The profiles below are a snapshot of how these companies interact with SaaS apps:
For more, see part 3 of this report
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Originally published at https://www.blissfully.com.