SaaS metrics to look out for in 2018

May 1, 2019

As we enter the last quarter of 2017, IT executives are paying more attention to the use of SaaS technology to accomplish their 2018 business objectives. However, with rapid growth comes the potential of market saturation and in order to stand out, SaaS vendors need to be smart about their marketing strategies.

However with SaaS, the technology is likely to stay for quite some time and CoreIT predicts the following for the coming year of 2018

High churn rates: It has been evident this year that SaaS companies experienced an annual churn rates of 5% or higher. And with that in mind even the poorest segment is projected to see a compound annual growth rate of 19.7 percent through 2019 which is likely to more than 25 percent greater than traditional software deployment by 2020.

Upsell and expansion for SaaS vendors: 2018 holds a very big market for expansion of SaaS. In 2018, we expect to see many more organizations take advantage of the simplicity and high-performance the cloud guarantees. The Cisco survey forecasts that SaaS will account for 60% of all cloud-based workloads - a 12% increase over 2017 predictions by next year.

Customer Retention: The churn and upsell of SaaS has been the fastest growing in the last 3 consecutive years and the streak is likely to carry on. The new metrics companies plan to track customer retention cost, customer health, and customer lifetime value to add more significant progress. As most SaaS businesses are based on annual subscriptions, keeping customers is as important as acquiring new ones.

Businesses that want to simplify operations and make it easier for their customers to access services will move more aggressively toward integrating SaaS into their business processes in future. Therefore CoreIT predicts 2018 to be a year of software-based service for traditional and new business. To know more about SaaS, cloud migration and a robust plan for the future reach out to us for IT solutions.

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