The Impact of COVID-19 on Cloud and SaaS Providers
COVID-19’s impact on the world has been enormous (understatement of the decade), no less so for the tech industry. The need for work from home in order to limit the spread of the virus resulted in an urgent need for remote working solutions, with cloud and software-based services at the forefront.
COVID-19’s impact on the world has been enormous (understatement of the decade), no less so for the tech industry. It’s been a challenging time for some and a time of opportunity for others, especially cloud-based platforms and providers of software as a service. The need for as many people as possible to work from home in order to limit the spread of the virus resulted in an urgent need for remote working solutions, with cloud and software-based services at the forefront.
Already established companies like Zoom and Slack saw a sudden serge in enquiries and users while start-ups sprouted and flourished to solve new problems. And it’s not just increased demand that’s change, either - companies old and new have needed to quickly adapt to the situation to make the most of the opportunities it has presented. Let’s take a look at some of those adaptations.
One important adaptation among SaaS companies was realising that they, as much as anyone else, had to get used to the idea of working mostly from home for the sake of their employees’ safety. Of course, given that they are already very much immersed in the world of cloud-based solutions, this was perhaps a little easier for them than other companies. For example, Josh Nielson of Zencastr told Inside Intercom that their team was already fully distributed, meaning that very little changed for them.
This process included adapting to new tasks or changes to existing ones, not just how they are completed. Nielson went on to say that the sudden spike in demand for their product around the world well beyond their growth projections meant that they had to struggle just to keep their servers running. At the same time, they’re getting enquiries from new potential customers they hadn’t even considered before and are trying to figure out how to adapt their product to meet this need.
A good product sells itself
The sudden need for innovative solutions to new problems led to tech companies finding their products doing the selling for themselves. The sudden spike in Zoom and Slack users is the perfect example of this. There was no additional push from salespeople - there was just a demand for a solution and they had the product to meet the need. Sales were an outcome of good product design and customer experience work.
At the same time, the new situation created new demands and SaaS providers found themselves needing to reach out to their client base to figure out what those demands are and how to meet them. Tom Ronen of Monday.com, also speaking on the Inside Intercom podcast, explained that they had set up forums led by their customer experience team to discuss the transition to working from home. This then led to a change in the platform’s sales and marketing strategies.
The question of whether this difference in approach compared to older, more traditional companies will endure or even expand in the wake of COVID-19 remains to be seen. However, the massive success of SaaS providers makes it likely that the broader business community will take some lessons away from the crisis for consideration. In particular, they will see that recent start-ups have been hiring customer success managers before looking for salespeople, on the basis that a good product will always trump a bad product well sold.
Hey big spender
One way in which the COVID-19 crisis has impacted SaaS that isn’t internally led is the amount of funding businesses working in this area of tech are likely to receive in the medium and long term. We’ve already effectively discussed the short term and the sudden spike in sales they received, but a survey by IDC looked into SaaS spending for the rest of 2020 and beyond, finding that while many organisations are cutting back in many areas to save costs in these uncertain times, most are continuing their investment in SaaS.
The study found that businesses have been accelerating their digital transformation programmes to shift more of their services into the cloud. This is a natural response to the widespread call for long-term self-isolation. People still need to live their lives, even if they need to do so from home and, with offices and physical shopfronts mostly closed, digital alternatives have gone from being a convenient bonus to an essential asset.
The knock-on effect of this is that SaaS and cloud software companies have a degree of financial security that is significantly lacking in other industries. Even that knocks on to people with programming skills that could be useful in these areas, who will likely find plenty of positions available for at least the next few years.
Pay it forward
Of course, not every company can ride out the economic turmoil of a global pandemic on the promise of future business, which is where a remarkable camaraderie among the SaaS start-up community has come to the rescue. A community of Indian SaaS founders called SaaSBooMi is working with fintech start-up firm Indifi to provide collateral-free revenue-based loans to help smaller companies endure these challenging times. While there are certain restrictions on who can get this funding, it shows an extraordinary degree of faith in the future of SaaS which, as the IDC survey found, is pretty secure.
Keep it simple and specific
The need to quickly adapt to the changing situation has led to a need to swiftly create or update products. The more complex the coding behind the scenes of a cloud or software-based solution, the longer it’ll take to iterate and the more likely a company will be to lose customers to alternatives. This being the case, COVID-19 has resulted in a far greater focus on low and no-code platforms. A report by Forrester showed that half of the developers they surveyed had either already adopted such an approach or planned to in future.
An excellent example of the efficacy of no-code software solutions came in the form of Unqork. The start-up’s product was used to put out a crisis-management platform for use by New York City authorities within just 72 hours. It’s not just a minimum viable product, either - the online portal is customisable so that it can be used in other parts of the US.
Together we stand
In these times of global challenge, the amount of cooperation across all aspects of the human experience has been impressive. Business - ordinarily a cut-throat environment - has been no less cooperative and one of the more remarkable innovations that the world of SaaS has contributed to help make everyone’s lives just a little less miserable is increasing integration with their competitors.
Slack has been an especially good standard-bearer for this movement. In order to create a more holistic platform, so that users can get to most of their business needs from a single program, they have rolled out major updates and announced others in the future, bringing integration with features from Microsoft Teams, Zoom, Cisco Jabber and other communication solutions.
This collaboration for the greater good is also well-illustrated in fintech, where a wide range of companies, SaaS providers and financial institutions have been working together to help banks help their customers. This has come in the form of new accounting services, virtual assistants, cyber security, identity management, digital banking and more. There are far too many excellent examples for us to list here.
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