Software as a Service (SaaS) is one of the largest segments of the cloud market, with revenues expected to grow 22.2 percent and reach 45 percent of total application software spending by 2021. The industry as a whole is expected to reach $76 billion per year.
With the rising demand for SaaS solutions, competition is increasing, and SaaS companies are saturating the market. For instance, SaaS initial public offerings (IPOs) have more than doubled over the past 12 years. Some of the highest-performing SaaS companies are growing their teams at an average rate of 56 percent per year.
As the SaaS industry matures, companies in this field must achieve product-market fit rapidly if they are to survive and stay ahead of their competitors. Many SaaS companies are turning to outsourced development teams to help them meet market demands in a lean and cost-effective way.
Read the four key benefits of outsourcing SaaS development.
1. Outsourcing lowers your startup costs
SaaS companies often launch with limited budgets and resources, which can make developing their minimum viable product (MVP) a significant challenge. By working with an outsourced development firm, companies can create an MVP without spending their entire budgets, or reducing their features to the point where the value for customers drops.
A leading example of a SaaS company that outsourced its web and app development so it could begin testing its MVP as quickly as possible is Slack. Outsourcing allowed the company to roll out a prototype and test its collaboration software without significant financial risks. The strategy clearly paid off as the company now has millions of users around the world and a current valuation of $7.1 billion.
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