SaaS companies have been getting a lot of attention lately. There is no mistaking that 2020 saw the birth of a great number of SaaS-companies. We’ve written about quite a few. Yet, these startups are no more than a fraction of the number of new entrepreneurial initiatives born in 2020.
Start-up SaaS companies are interesting to keep an eye on. They offer potential investment opportunities, offer new solutions to age-old problems, and provide a glimpse into the future.
However, with all eyes looking at young companies, one could be fooled into believing that SaaS-companies are the new kid on the block. They aren’t. As a matter of fact, SaaS-companies already play a large role in everyday life. Both individuals and companies already rely strongly on the services provided by SaaS-companies. Don’t believe us? Read on for some examples of SaaS-companies to discover that you too utilize the potential of SaaS.
Marketing and Sales
No company can do without at least some software to streamline their marketing and sales efforts. This is why it is easy to find examples of SaaS-companies providing such B2B solutions.
Salesforce is undoubtedly a name that every single professional in marketing and/or sales recognizes. It’s hardly a newcomer, as this is an example that not every SaaS-company would be refused a drink in a bar. Founded on January 1st, 1999, this company is well over 21 years old.
One might wonder if Salesforce really needs an introduction, as it has set the standard for all Customer Relations Management (CRM-) systems in the markets. Thanks to Salesforce, sales reps have access to all relevant information about clients or prospects whenever and wherever they need it. The Salesforce SaaS-products are modular and versatile, making it a feasible option for mom-and-dad-stores and multinationals alike.
Its position in the market for CRM is firm and undisputed, generating a whopping US$ 5.42 billion in the quarter ending October 31st, 2020. The company expects to close the books for the fiscal year 2021 with total revenue of US$ 21,11 billion. For the year after, the board of Salesforce expects revenue to jump by more than 20%, to US$ 25,5 billion.
Salesforce operates at a GAAP-operating margin of only 2,0%, resulting in roughly US$ 0,05-0,06 earnings per share. While this is a relatively low margin, it’s higher than many newcomers, operating at a loss.
Whenever a company is successful, it’s only a matter of time until another company comes along deciding they can do a better job. In the case of Salesforce, one such newcomer is Hubspot. Challenging the market leader, they provide the same basic functionality…with some additions.
The big difference between Salesforce and Hubspot is how many aspects of doing business are integrated. Both examples of SaaS-companies offer a cloud-based CRM platform. But while Salesforce allows third-party developers to easily integrate with their platform, HubSpot tries to provide all other features themselves.
So if you’d want to link your CRM with a content management system, in Salesforce you’d have to be talking to two companies, whereas Hubspot offers a one-in-all solution.
Does this make Hubspot a better solution for your company? That’s dependant on your particular situation and context. But since this SaaS-company was founded (June 9th, 2006) it has become a household name in B2B cloud software.
In retail, sale, and payment happen at the same moment. Many shops have cash registers which register all transactions and print out reports to process in your bookkeeping. Modern registers are linked to your financial software directly.
Cash registers are expensive though, with prices up to US$ 2000. What’s worse, the average cash register is bulky and heavy. That’s no problem if you have a fixed shop, but these days, most transactions take place outside of the company. You cannot expect a customer to come to your restaurant when you deliver them their order. Nor is it practical to bring a cash register if you are a traveling salesman.
So how does the pizza delivery guy, or the farmers’ market salesman ensure it can record transactions? They turn to the cloud. One example of SaaS-companies that enable transactions at any point-of-sale is Square, founded by Jack Dorsey and Jim McKelvey in 2009.
Basically, Square offers users in the US, Canada, and Japan a cloud-based alternative including everything top-end cash registers provide.
It tracks sales, allows you to accept credit cards, helps run a webshop, and even keeps track of your inventory. Square is the perfect solution for small retail businesses.
When the internet turned out to be more than a gimmick for geeks and nerds, companies selling to the general audience were struggling. Some companies believed that online sales were a fad, and kept relying on brick-and-mortar stores. Most of these companies have been wiped of the map, often by newcomers who operated online only.
The companies who survived the appearance of the internet recognized that online sales were going to grow. But how do you effectively manage a large number of sales channels? Even before online shopping, this could be a challenge, as many companies sold to retail and wholesale, and even had sales representatives on the road.
Things were about to get worse, because “the internet” turned out to have many faces. These days, you can shop online using your pc, but also your laptop, your tablet, or your phone. All these channels show your website in a different manner. Having to develop your webshop by hand for every single device would be a nightmare.
Shopify, founded in 2004, provides a commerce platform for small and medium-sized businesses. It allows you to design, set up, and manage several online sales channels, for all devices, but also for old-school brick and mortar shops. If you develop apps, you can even use the Shopify API to sell your apps on their proprietary app store.
Not only does Shopify help you design your storefront, it also takes care of your back-office: payments, shipping, customer engagement, Shopify has you covered.
It is entirely cloud-based, and always has been, which means you can use it anywhere you want.
Running a business
Marketing and sales are essential for the success of any company. But even if you have these two mastered, success is far from guaranteed. Companies also need to organize. If you are an independent contractor with one employee, this might be easy enough. You tend to know what’s going on. But as your company grows, it becomes harder to remember all the details. This is why larger companies have staff departments such as HR and Finance.
In the last few decades, several examples of SaaS-companies entered the market offering cloud-based alternatives for in-house hardware and software.
Say you need application software for your company, for instance, a tool for asset management, HR, manufacturing, sourcing and procurement or anything else you can think of. Who would you call?
If you need an integrated package, SAP would be high on the list.
But wait, is SAP really an example that earns a spot in an article discussing examples of SaaS-companies? After all, the company was founded back in 1972, the pre-internet era, when companies had to run all their software on their own server park. Indeed, it would be hard to find something more opposite than SaaS-solutions than the early SAP-products.
However, this German software provider has adapted, moving their attention more and more on cloud computing. For most users, this might have gone completely unnoticed, a testament to the famous German “Gründlichkeit”
Combining the latest technological developments with decades of experience with corporate needs and wants, SAP Enterprise software still manages to be the master of their trade. SAP turns 50 next year but is far from an old man. If anything, this company is the perfect example that it is possible to re-invent and rejuvenate yourself.
Human Resources, Payrolling, and Financial Management are always developing. Every year, new regulations replace the old ones, forcing professionals to constantly update their knowledge. In such a dynamic environment, the last thing you need is software that is cast in iron.
One of the huge advantages of SaaS is that you can outsource the responsibility for software updates to a specialist. Workday is one such specialist. Founded in 2005, Workday is a Nasdaq-quoted company offering SaaS-based enterprised solutions for human resources and payrolling, while also tackling financial management challenges.
No longer do Workday-clients need to close the gap between their HR-system and their financial reporting tool, Square provides a single, integrated, system that can be used by both small companies and Fortune 500 enterprises. Examples of clients who use Workday are Santander, Siemens, Visa, Roche, Salesforce (!), and Netflix.
Workflow management can be tricky. Even if your processes are perfectly designed, it is only a matter of time until an employee makes an error. Luckily, there’s software to help us with that. ServiceNow is an example of SaaS-companies that provide such software through their cloud platform.
Before founding this company in 2004, Fred Luddy worked for another software company. When this company went belly up, Luddy decided he’d offer the same services through a new company. This is why he founded Glidesoft in 2003, which became ServiceNow in 2012.
ServiceNow managed to convince a venture capitalist to fund the new company with US$ 2,5M. Since then, the company made several acquisitions boosting its growth to the current size. When the company went public in 2012, the IPO amounted to US$ 210 million.
From the humble start, ServiceNow has been continuously developing it’s SaaS-products, now offering solutions for IT service management, help desk services, and incident reporting. Nowadays, ServiceNow also covers HR support, financial management, vendor performance management, and many other solutions, making its software more and more a full-service solution for larger companies.
The reason many people believe that 2020 was the year where SaaS made its breakthrough might very well be the covid-19 pandemic. Indeed, being forced to work from home has made many (office) workers discover that a lot can be done online. And while some companies still had to rely on remote access to actual on-site computers, most professionals have been learning how to work with the following examples of SaaS-companies.
Do you remember MSN Messenger by Microsoft? This online messaging service was founded in 1999 and became one of the most popular communication tools until it lost the race with competitors in 2013.
Luckily, on January 1st, 2009, Slack was born. Slack offers an elegant tool for communication, which is easy to keep track of. Have you ever arrived at the office to discover your inbox has exploded with “replies to all”? It can become messy, and hard to discover who said what at which point in time. With slack, it’s a lot easier to quickly join the conversation.
Slack is used by a huge number of small companies, who utilize the free subscription plan. Larger companies benefit from the more advanced premium plans, including well-known companies such as Uber, Time, and the U.S. Department of Veteran Affairs.
On December 1st, 2020, Slack was bought by one of the examples of SaaS-companies we mentioned earlier. Salesforce paid US$ 27.7 billion to obtain ownership of this communication tool. At the moment of this purchase, shares of this SaaS-company were listed at a price of 42,88, significantly higher than the price of 22,32 at which trading opened on January 6th, 2020.
If you’d summarize 2020 with one word (which cannot be corona), you’d probably use the word Zoom.
Founded in 2016, this is an example of SaaS-companies that experienced a boom in 2020. During the first months of last year, business was going on as usual at the Zoom HQ in Malaysia. Happy with the niche they found, Zoom mainly focused on providing video conferencing for large companies.
However, things were about to change. With everybody forced to work from home, Zoom became the substitute for the coffee machine. Quick exchanges with coworkers, which would normally be done while walking down the hallway, suddenly were done with video.
Zoom also became popular for other forms of communication. It didn’t take long until educators discovered that Zoom could be used for online classes. Churches moved their mass and celebrations to Zoom, while even happy hours, parties, and romantic dates were done via Zoom.
The sudden rise in activity caught Zoom by surprise, making the service this SaaS-company provided somewhat unstable. Furthermore, flaws in security appeared, introducing us to the new concept of “Zoombombing” (which, in all honesty, did not only hit Zoom but all videoconferencing tools).
Zoom responded swiftly and rapidly, not only boosting its security but also introducing new features and functionalities at a pace that would be hard to believe if you hadn’t seen it yourself. This flexibility has made Zoom an important player in business, education and entertainment. Boosting it’s stock price from 66.63 at the beginning of 2020 to an amazing 340,40 at the beginning of 2021.
When working together, it’s essential that you all use the same documents. Traditionally, you’d use a shared folder (F://) but this has limitations. Great limitations. Shared folders can be accessed only at the office unless you enable remote log-on. The latter, however, places a heavy responsibility on your IT-department to ensure security. Loss of data could not only cause internal issues, it might also break privacy regulations.
If your company does not have the required expertise (and not many companies do), it’s wise to turn to Dropbox.
Using Dropbox is intuitive and easy. That’s why Dropbox currently has far over 500 million registered users, who rely on the SaaS-company for secure file storage, file sharing, and online collaboration.
Many of these users are corporate users, but the free version of Dropbox is also often used by individuals. Dropbox is used to store holiday photo’s in Sydney, while students in Hamburg use it to work on a group project.
There are examples of SaaS companies if you know where to look
As the list above shows, examples of SaaS-companies are everywhere. Often, these are names you are very familiar with. You just have to know where to look.