The Evolution of the SaaS Stack and What Could Come Next


This post is part of our series covering the SaaS industry. You can find all our SaaS related stories on the P9 Capital Medium Channel.


The on-premise era

Back when software was only “on-premise” the landscape consisted in huge players dominating the different verticals with a horizontal approach (Microsoft, SAP…). For the users there was no such thing as choosing “my software stack”.

The first SaaS champions

Then internet penetration grew and the SaaS model started to make sense for businesses. The first big “SaaS” pure players got traction. They didn’t have an horizontal approach but rather a vertical one, covering many needs within this vertical.

Users started to have more choices.

The first SaaS explosion

As SaaS penetration grew (businesses of all sizes are ready to buy SaaS now) and as the technological barriers kept going down, many verticals saw an explosion of new players. These new startups very often focus on a more specific part of a vertical and offer products with better UX/UI than what the bigger players can do.

At that point users really had to start thinking about their SaaS stack and what they should use.

And Now?

The main SaaS verticals are really getting crowded. From big players to medium / small ones and even “micro-SaaS” (e.g SaaS which are just ‘extensions’ / ‘plugins’ of bigger SaaS) people have, literally, the choice between hundreds / thousands of solutions.

And as people keep adding more and more SaaS in their stack the pains linked to software interconnection, data migration, stack management, workflow integration, experience customisation etc… keep growing as well.

So new hybrid products / new approaches are organically emerging to try to fill these gaps:

Vertical SaaS Hubs: they centralise the different SaaS of the user’s stack in order to manage them better. Focused on one vertical.

Examples: Lytics for the marketing vertical and elev.io for the support one

Unbundling APIs: they offer SaaS packaged as an API instead of a traditional finished product so the user can build its own UX according to its need.

Interesting approach to build “in-house” products (rather than reinventing the wheel) or complimentary products for your existing stack. I wrote a more detailed post about these products here.

Examples: Clearbits for the marketing vertical and supportive.io for the support one

Customer Data layer: segment.io is “the single hub to collect, manage and route your customer analytics data.” How it works: you send all your customer data to segment.io (through a javascript tag) which will route it back to the SaaS you’re using. By centralising your customer data in one layer you can migrate from one service to the other seamlessly or connect two software in different verticals with the same customer data.

Command & notification layer: when you have many apps in your stack, one problem is to be kept informed without logging in every time. Slack is this notification layer (you can plug your SaaS to Slack in order to receive notifications directly there). It also enables you to launch actions directly from the Slack interface. Like a command terminal. ”/hangout” to launch a Google hangout for example.

Additional comments

Transversal layers

  • yes I believe that segment.com is an important product for the SaaS ecosystem (Slack is already big)
  • yes I believe that additional layers will appear. Which ones? Hard to predict, I don’t know yet (discovery, single sign-on, security…?…).

Implications for SaaS makers

  • it’s becoming important for SaaS makers to offer integrations with the relevant transversal layers (for example a segment or Slack integration when relevant)
  • you might not like that a customer can migrate from your product to a competitor in 2 clicks, but well, the customer doesn’t care. He will not choose you at first if you don’t allow it.

SaaS Hubs

  • these hubs can be just “interface” hubs (see the example of elev.io) or offer deeper feature integrations with your stack, like Lytics. The “hub” concept here is broad and people might use several hubs at the same time.
  • these hubs are connected to the transversal layers as well. Lytics and elev.io have segment.com integrations.

As I said, as the stack keeps growing we’ll see more and more new hybrid products and approaches coming. So I’m expecting everything to evolve / change in the years to come.

And of course if you are a startup trying to solve these problems with innovative approaches, I would love to hear from you: [email protected]