2020 has been a rough year. It may have felt like a series of low-points. For many in the SaaS industry, however, this was their best year ever. Paul French of Intrinsic Search takes the opportunity to look ahead at what 2021 has in store for the SaaS-business.
‘Lucky to work in SaaS’
“In any down market, there are winners and losers. But the SaaS sector has done so well, and we should count our lucky stars that we work in SaaS”, says Paul French. He is the Managing Director of Intrinsic Executive Search, a company specialised in finding C-level executives for the SaaS-industry. “Just check out the stocks, valuations and IPOs in 2021.”
French considers 2020 a transition year for the industry. “The events of this year set the scene for 2021 like no other in recent history, affecting such a vast swathe of the global population. The changes that took place in 2020 will mean that many aspects of our business and personal lives will not go back to the way things were in 2019.”
“I sense that a lot of the changes we have seen were already in play before COVID-19 came to all towns near you. The pandemic just created acceleration in the same way that Microsoft CEO Satya Nadella in April 2020 said, “We have seen 2 years of digital transformation in 2 months!” The launch of COVID-vaccines is the game-changer that we have dreamt of most of the year. But we are not going to get back to a new normal until much later in 2021.”
As an industry insider, French sees the following developments in the realm of SaaS for the coming year:
1: SaaS Sales teams remain at home
“SaaS execs have been remote working since well before 2020. But COVID drove that transformation far more quickly to the point that just about all SaaS sales executives are working from home now. Anecdotal evidence from my clients suggests that for the most part, SaaS sales executives have adapted well to WFH, although some have had challenges to overcome. Leaders have had to adopt leadership styles to suit individual team members. The modern sales executive will be in demand in 2021. They will be the rockstars of the industry.”
2: Inside sales on the rise
“We will see a dramatic uplift in hiring for inside sales teams and propagation of such teams across the SaaS sales ecosystem. All SaaS executives have become inside sales executives in 2020 to the greater part. Even the most senior level sales executive has been in a predominately inside sales role, using Collaboration to meet. At the minimum, they are on the phone an awful lot more.”
3: Increased need for SaaS tech-tools
“Sales, Marketing, Collaboration; these are already highly prevalent and will become more so as companies adopt a hybrid approach to work. So there will be a need for better and improved tools to support sales and marketing activities, team cohesion, collaboration and all the other features used to support a hybrid and WFH team. Of course, all these providers will be SaaS and cloud services companies. Don’t go selling those SaaS shares just yet.”
4: Hybrid and WFH do away with tedious commutes
“A recent Gartner polling in the USA suggested that 98 per cent of office workers wanted to WFH for at least part of their career. In the same poll, 82 per cent of leaders said that they would provide an environment for hybrid working or WFH. Just look at the number of major tech companies that have made announcements on this subject.”
Read also: Hiring SaaS sales executives in the ‘new normal’: these are the do’s and don’ts
“This is not the time to be an investor in commercial office real estate. The 3-hour daily commute, busy trains and roads and all those stresses are unpleasant, unhealthy and from now on just not necessary. People have seen mother earth start to heal and they like what they have seen. The way we work, certainly in the services industry has changed forever. I have clients of all sizes that are considering some bold decisions like deciding to shut the office completely, not continuing their current lease or choosing a small hybrid office setup.”
5: Movement of the workforce: bye big city
“London, Paris and many US cities are seeing much more than a trickle of people leave for a quieter and healthier life. We just made a report, based on analysis of USPS data, that shows that by October, 150,000 people had left NYC just this year . This matters as many major cities are tech hubs with many tech employers. London, San Francisco and many other major cities have been the HQs for many tech companies.”
“If people continue to move out of town, this will affect HR, hiring and office policies, WFH, as well as the rental agreements that companies have with their landlords. Will companies have to pay so much to hire people in the cities? Will companies be able to pay less to hire people in the shires? The movement of workforces is going to have numerous knock-on effects to the way SaaS firms conduct their business.”
6: Artificial Intelligence and robotics on the rise
“The continued growth and propagation of tech in every aspect of our lives, with robotic processes and AI taking over manual processes that would previously be performed by humans, will mean that ‘big tech’ and governments will have to intervene. By this, I mean that the resultant loss of human jobs cannot be brushed under the carpet and taxes will need to be levied to support reskilling and compensating those that are affected. This was a constant, well before 2020, but the current economy has only accelerated this through COVID-enabled digital transformation.”
7: Focus on mental health
“Lockdowns, health concerns, loss of jobs and all the other effects of COVID-19 have created many issues in and out of the SaaS sector. Companies have and will become more focused on their employees’ mental health well-being. This was already a topic well before COVID. But this is again an example of how this year has accelerated aspects that were already on the agenda.”
8: Inflation and higher salaries
“With all that quantitative easing and huge borrowing, we shall continue to see a rise in inflation. Devaluations of currency, increases in asset prices, further creating a dual-tiered economy plus tax increase to pay for the costs of dealing with COVID. Sadly, sectors such as hospitality, retail and travel may have a tough time. However, salaries in SaaS may only go one way: up!”
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9: More demand for SaaS headhunters
“Finding the right people is already tough for SaaS companies in certain markets. As we move into the new normal, there will be a big demand for headhunters, since the market is dealing with pent up demand for hiring. At Intrinsic Search, we are already seeing this in the back end of 2020.”
SaaS in 2021
Besides his predictions, French is optimistically looking forward to next year. “My eyes are square from countless Zoom and Team-meetings. And if you are like me, you are raring to go out and meet clients and partners again. So long as the vaccines work, and enough people take them, we will see a much better year in 2021.”
