#SaaS | Delian Partners SA

In the digital era, data isn't just a commodity: it's the lifeblood of businesses worldwide. From online interactions to customer reviews and social media posts, every digital footprint adds to this immense pool of information. However, a significant portion of this data isn't neatly organized: 90% of data is unstructured, a mix of text, numbers, and dates from various sources and formats. This data contains valuable insights, but companies need innovative solutions to use all this information effectively.

Recognizing the need for innovative solutions, businesses turn to Software-as-a-Service (SaaS) technology, which stands at the forefront of the data revolution. SaaS operates on a cloud-based model, where third-party providers host applications accessible to users over the internet. What sets SaaS apart is its elimination of the need for users to install, maintain, or upgrade applications individually. Instead, users can seamlessly access the software through a web browser, paying a subscription fee either monthly or annually. This approach not only simplifies data management but also empowers businesses to effectively harness the untapped potential of unstructured data, transforming it into valuable insights for strategic decision-making.

An example of SaaS model application is Elastic, a cloud-based platform designed to handle large volumes of unstructured data accessible to users over the internet. What sets Elastic apart is indeed its remarkable adaptability as users don't need to install any software on their device. Elastic provides its services on a subscription basis, allowing businesses to pay for the services they use without the hassle of upfront costs.

Concur is another company that operates on a SaaS model, offering cloud-based software solutions to businesses for managing their travel expenses and invoices. By leveraging SaaS technology, Concur’s users can access travel, expense, and invoice management tools from anywhere paying a subscription fee based on their usage. Also, Concur's SaaS platform can connect with other business software, making it easy to share data between different systems. By doing so, Concur transforms seemingly disparate pieces of information into meaningful, actionable insights that empower businesses to make well-informed decisions related to their travel expenditures, employee preferences, and overall travel management strategies.

Car-sharing leader Uber has successfully integrated SaaS technology into its operations, revolutionizing the way it serves its customers. Through advanced data analysis, Uber integrates and processes unstructured data coming from different data sources, including traffic patterns and GPS information, to make real-time decisions on pricing and optimizes driver routes. Moreover, UberEATS, an extension of Uber that specializes in food delivery, employs sophisticated data analysis software: By understanding customer preferences and behaviors, UberEATS can predict the arrival time of a customer's UberEATS order, ensuring a seamless customer experience.

The Software-as-a-Service (SaaS) market is experiencing unprecedented growth, reaching $148.75 billion in 2021 and projected to soar to $702.19 billion by 2030, as reported by Gartner. In this era of data-driven decision-making, the importance of SaaS technology in harnessing unstructured data cannot be overstated. Companies are increasingly recognizing the pivotal role SaaS plays in converting raw data into actionable insights and enhancing their growth prospects.

The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.

Today, Software-as-a-Service refers to a huge number of digital solutions that allow companies to externally manage, own, and deliver software, and represents one of the fastest-growing segments of the economy.

SaaS uses the Cloud infrastructure to store data and allow users to access the service via the internet browser, from everywhere and without the need to download anything. One of the major benefits is that software never goes out of date, just keeps getting updated.

SaaS penetration has accelerated in recent years, disrupting almost every sector and vertical you can think of. E.g., Netflix has become the leader of the SaaS providers in the entertainment industry, with a subscription-based streaming service providing users with an infinity of movie and tv series accessible from any device, notably bankrupting established market leader Blockbuster Inc. In recent years many other companies embraced the Netflix business model and introduced their streaming services, such as Disney+, Amazon Prime Videos, and Sony LIV.

Tekion is disrupting the automotive industry by providing the first and fastest cloud-based and end-to-end automotive SaaS platform, including all functionalities of a dealer management system (DMS). Tekion was founded by the former CIO of Tesla, who was responsible for building Tesla’s digital and information systems and software platform of the EVs company. When he launched Tekion, he aimed to make the car buying experience more efficient while increasing profitability.

Tekion provides dealers with the IT infrastructure through which they can manage inventory, keep track of customers’ leases, sell additional services to clients, and review loan options. By efficiently communicating with all the key stakeholders in the automotive sector – dealers, car manufacturers, and customers- the platform provides a rich and unified consumer experience while avoiding losing valuable information. In addition, the platform keeps updating over time thanks to cutting-edge technologies such as Machine Learning, Artificial Intelligence, and IoT. Tekion’s shareholders include established automotive companies such as Hyundai, BMW, and General Motors.

Because of the huge amount of data to be stored in the cloud, companies may experience difficulties in managing and monitoring all the flows of information. End-to-end software Datadog helps companies by providing an integrated monitoring and analytics platform to process information in real-time and across different clouds. Flexibility and accessibility today are not just a benefit, but a mandate for companies that want to scale up globally and be able to adapt their business to rapid environmental changes. Datadog is used by companies of all sizes and industries, and it aims to increasingly democratize the use of the various tools offering an integrated interface where different teams can create, monitor, and gain valuable metrics on the company’s activities.

As reported by Gartner, the SaaS industry is worth about $145bn, and it is expected to experience its largest annual growth in 2022, reaching a value of $171.9bn by the end of the year. The benefits of the SaaS model are evident, and many companies are making the transition to a subscription-based service: By 2026, it is predicted that 50% of organizations will integrate SaaS application.

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