SaaS is the latest business development that has become a popular software solution, quickly gaining traction. Companies are blending their SaaS products with other platforms and systems for large-scale operations. Thus, more enterprises will benefit from their service without having to set up complex systems independently, saving them time, effort, and money.

Brief history of SaaS

At the time of its inception in 1965, everything related to computers and data processing was costly and out of reach. A basic computer with 2MB of RAM costs roughly $9 million. It requires a large amount of physical space, teams of more than 60 people to load the instructions, and air conditioning to keep it running smoothly and without processing losses.

The same year, IBM introduced a service via which their computers could be used by big businesses like banks and government agencies, enabling them to process all the data they required with lesser spending and minimizing the cost of maintaining these operations.

The SaaS industry has grown since then, reaching $123 billion in revenue. – Statista

Thanks to SaaS, businesses of all sizes can now access and use the software more affordably and efficiently. The history of SaaS profoundly connects with the Pre-SaaS era.

Pre-SaaS era: traditional software models

SaaS replaces physical media such as floppy disks, CD-ROMs, and DVDs that were used to distribute applications. Licensing and installing the software were the responsibility of individual users.

It was a lengthy and expensive process that often resulted in compatibility and maintenance problems. SaaS emerged as a result of limitations in traditional software models. It was the pinnacle point of the history of SaaS when it evolved.

The rise of SaaS: transforming the landscape of software delivery and consumption

To properly understand the history of SaaS, we need to analyze different phases of its growth.

Artificial Intelligence

AI has revolutionized our work by automating repetitive tasks, reducing errors, and increasing productivity. SaaS platforms that integrate AI can help businesses:

  • Improve decision-making: businesses can make better decisions using AI-powered analytics tools.
  • Enhance customer experience: analyze customer behavior and preferences and personalize their offerings.
  • Streamline operations: by automating routine tasks, AI allows employees to focus on more creative and strategic tasks.

Machine Learning

ML helps computers improve their performance by learning from data over time. By incorporating machine learning into SaaS platforms, businesses can benefit from the following:

  • Predictive analytics: ML algorithms can analyze historical data to identify patterns and predict future trends, helping companies to stay ahead of the competition.
  • Anomaly detection: Machine Learning can detect unusual patterns or behaviors in data, allowing businesses to identify and address potential issues quickly.
  • Natural language processing: ML-powered chatbots and virtual assistants can understand and respond to human language, improving communication and collaboration within the workplace.

Migration to PaaS

Businesses can develop, run, and manage applications using Platform as a Service (PaaS). Migrating to PaaS can help enterprises to:

  • Reduce costs: with PaaS, companies no longer need to invest in or maintain costly hardware and software.
  • Increase scalability: PaaS lets businesses scale up or down their applications based on demand.
  • Accelerate innovation: with PaaS, companies can quickly and easily develop and deploy new applications.


SaaS products that are small and niche are known as micro-SaaS. These products can help businesses:

  • Unique requirements: organizations can customize software-as-a-service to meet their specific needs.
  • Improve integration: Micro-SaaS products enhance existing software systems and streamline workflows.
  • Increase agility: businesses can adapt quickly to changing market conditions, and customer needs with Micro-SaaS solutions.

Revolutionizing benefits of SaaS

Throughout the history of SaaS, it has helped businesses;

Streamlined upgrades and maintenance

The fact that the provider handles upgrades and maintenance is one of the most critical advantages of SaaS. Traditional software licenses require you to schedule updates at particular intervals to guarantee that your other apps will work with them. With SaaS, upgrades occur automatically per your provider's criteria or company demands.

Pay-as-you-go pricing

You don't have to pay for software outright when. You pay only when you use it each month. It allows businesses to scale up or down their usage depending on seasonal demands and other factors without paying for new features or functionality they don't need at any given time. Furthermore, it helps them avoid paying additional fees for unused licenses that may lie on an old computer in storage.

Security and compliance

Secure cloud-based applications run on dedicated servers only accessible by authorized personnel. IT teams can thus protect data from unauthorized access or theft by hackers. Several cloud-based programs allow users to encrypt critical data before transferring it. HIPAA, GLBA, and FINRA compliance is ensured this way.

Integration with additional platforms and software

It is easy to integrate SaaS with other systems and platforms. Compared to buying CRMs, ERPs, or other software outright, SaaS makes it easier to incorporate them with SaaS. Due to their APIs, all these platforms can be easily integrated with other systems.

Lower cost and increased flexibility

The most significant benefit of using SaaS is its low cost. Traditional enterprise software requires an upfront investment in hardware, software licenses, and maintenance contracts. But SaaS only requires a monthly subscription fee based on usage. It saves you thousands of dollars on licenses. A small business or start-up with a tight budget may find it especially useful.

The booming SaaS market: why developing SaaS solutions in 2023 is a smart investment

Undoubtedly, developing SaaS in 2023 will be well worth the effort. At this stage of the history of SaaS, demand for SaaS solutions will increase as businesses and people hunt for more flexible and scalable software solutions.

A MarketsandMarkets analysis projects that the SaaS market will reach $1,240.9 billion by 2027, in line with this trend.

The next frontier: innovations shaping the future of SaaS

The future of SaaS promises continued growth and development, driven by its impact on businesses and industries. Potential challenges and opportunities for SaaS companies include competition, technological advancements, and changing customer demands.

The nature of SaaS is changing. These trends will drive the future of SaaS:

Serverless computing

A trend that is sweeping the computing industry is serverless computing. The key is to run your code on the infrastructure of a cloud service provider without having to manage any servers or infrastructure yourself. It frees up your time to concentrate on building code for your company rather than running servers.

No-code platforms

With no-code platforms, anybody can build software without needing to write code. Instead, they must connect different functionalities through connectors or APIs (Application Programming Interfaces).

These platforms also allow users to integrate with other applications and services — including those from competitors — making them versatile and powerful tools for building applications quickly and at scale.

Edge computing

More companies are utilizing the cloud, and as they do so, they are also seeking ways to increase productivity by integrating edge computing into their infrastructure. Edge computing enables quicker processing and data access, which can assist businesses in making faster, more effective decisions. Edge computing brings only relevant data to its customers.

Blockchain-based SaaS solutions

An online business could be transformed by blockchain technology. While it's most commonly known as the technology behind cryptocurrencies like Bitcoin, blockchain has many other uses beyond financial transactions.

One area where blockchain technology could significantly impact is securing digital information and verifying identity. It could allow businesses to store sensitive data more securely while protecting user privacy by giving them greater control over their personal information.

Hybrid SaaS solutions

Hybrid SaaS solutions combine the best of both worlds: the ease of use offered by no-code platforms with the flexibility and customization capabilities provided by traditional SaaS solutions powered by code.

Internet of Things integration

IoT devices generate massive amounts of real-time data daily, but it's only possible for businesses to analyze all this information with a significant effort from IT departments.

Future SaaS systems will interact with IoT hardware, enabling companies to analyze data from various sources, including sensors, cameras, wearables, and other internet-connected hardware. It allows businesses to base decisions more effectively on facts than just gut feeling.

Final words: a look at the present and future of software delivery

It's been a wild ride for SaaS evolution, but it makes sense that businesses would move to hosted services and applications rather than doing everything themselves.  

If you need to cope with SaaS solutions, you will be satisfied with the templates provided by Apptension. You can host your SaaS business with Apptension for maximum uptime, bandwidth, and storage. These are the perfect conditions for the smooth running of your business.

Get in touch with Apptension to scale up your digital journey now!