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SaaS is quickly becoming the go-to platform for many enterprises and individuals. Did you know that the SaaS industry has grown by over 500% in the past seven years? A large part of the SaaS business is based on micro-SaaS applications.
You may not have heard of micro-SaaS, but it’s likely you already use several applications based on this model. This article discusses what micro-SaaS is, its benefits and why it’s so popular. Keep reading to learn more.
Alternatively, if you’d like to understand the SaaS business model as a whole, consider reading Idea Maker’s extensive guide.
What Is SaaS?
Software-as-a-Service is a cloud-based application deployment and delivery model. It allows users to access the software remotely so long as they have an internet connection, without the need for specific hardware. SaaS applications are typically based on a monthly subscription model, whereby users pay higher fees for greater access to functionality.
What Is Micro SaaS?
A micro-SaaS application is based on much of the same model as regular SaaS. However, micro-SaaS businesses tend to target niche markets and operate with a very small team, having little to no external funding. They are specifically made for small companies and to solve particular problems.
Industry Trends & Data
There’s no denying the importance of SaaS applications over the last several years, especially in 2021. But how has the growth of SaaS impacted workers, and where do the trends lead?
Growth in 2021
One major factor contributing to the growth of SaaS and micro-SaaS businesses in 2021 was the pandemic. COVID-19 saw 20-30% of US employees working remotely, compared to only 5% pre-COVID. This likely meant an increase in businesses investing in SaaS applications, as they are an excellent option for cloud-based work.
For example, not all employees will have access to the latest and greatest technology, meaning some users may struggle to run traditional software on their computers. SaaS solves this issue by allowing users to work in the browser. As a result, all employees require is access to an internet-connected device with a web browser.
What’s more, micro-SaaS platforms allow employees to collaboratively work on the same platform, meaning work is more cohesive. For instance, collating data remotely could be confusing if everyone were working on separate offline Excel spreadsheets. To learn more about how remote software helps your workforce, check out Idea Maker’s helpful guide.
Predictions for 2022
With 52% of web traffic coming from mobile devices, the mobile SaaS market is expected to grow by $7.4 billion in 2022. This means many SaaS providers are likely to shift their services to a mobile focus, impacting the nature of remote work. If SaaS applications work on mobiles just as they do on computers, there’s no leaving the office for employees.
On the one hand, this is great for productivity and efficiency, as work can be done when required regardless of the time of day and circumstance. On the other hand, this could intertwine work and personal life too much, making it hard for employees to remain motivated. However, there are several ways you can keep employee morale high, even in a remote work world, as outlined in Idea Maker’s brief guide.
Benefits of Micro SaaS
It’s easy to look at the data and see how quickly SaaS is growing, but what actually makes it so popular? Here are just a few benefits of micro-SaaS applications.
Tailored to Niche Market
The main draw to micro-SaaS is that they’re generally created to solve niche problems, with functionality that focuses on only a handful of tasks. For example, your businesses may require an application to track remote employees’ work hours. A micro-SaaS application will serve this purpose and just this purpose, offering a solid and straightforward user experience.
With this growing trend towards SaaS businesses focusing on B2B transactions, many more niche issues are being identified and solved. This means a micro-SaaS application is likely available to satisfy your small business needs.
As discussed above, micro-SaaS applications lend themselves to remote work due to their cloud-based nature. This makes them an excellent choice for businesses looking to move out of the office and reduce traditional overheads. A remote workforce means no office rent, utilities and hardware maintenance, saving your business money.
Some studies show that remote working improves employee productivity compared to working in a traditional office space. As a result, not only can you expect fewer overheads but also an increase in output when using micro-SaaS as a basis for your remote office.
Another benefit of micro-SaaS is the flexible pricing structure these applications employ. Flexible pricing means businesses can pay fees that fit their budget and only for features they need. For example, if a company only requires the features available on the cheapest tier, there’s no pressure to upgrade and pay more for surplus functionality.
This makes micro-SaaS a cost-effective solution, as businesses do not need to invest in expensive software with hefty annual fees. As a result, using SaaS applications is key to having a profitable business in 2022.
Predictable Recurring Revenue
From a SaaS business perspective, the main benefit to developing such software is its predictable recurring revenue. As users pay monthly subscription fees, it’s easy to estimate how much income the application will generate each month. As a result, the micro-SaaS business model is a stable way to generate revenue.
What’s more, because a small team or individual typically runs micro-SaaS applications, overheads are minimal. This makes micro-SaaS a profitable business venture for all those interested in software development.
Drawbacks of Micro SaaS
As with every business and technological model, despite its many benefits, micro-SaaS has some drawbacks. Here are just a few.
This issue is not limited to micro-SaaS but SaaS in general. Though micro-SaaS is accessible through any internet browser, this can cause performance issues. For example, if a user has a poor internet connection, a slowdown may be apparent.
Thankfully, this issue is easily rectified by upgrading your internet service provider. Of course, this can cause problems for remote workers, but this is mostly only an issue for applications with complex backends that require lots of data to be downloaded.
Micro-SaaS applications have a narrow focus, meaning they provide particular functionality. When investing in micro-SaaS software, you may only need to solve one problem, but as time goes on, your scope may increase. Due to having intentionally limited features, you will find it challenging to scale your micro-SaaS application’s usage up.
Due to the subscription-based model SaaS applications follow, you are not bound by long-term contracts. This means that if you find yourself needing new features, you can cancel your subscription and invest in another piece of software.
Popular Micro SaaS Ideas
Now that you know what makes micro-SaaS such a popular model for businesses and users let’s look at some excellent micro-SaaS ideas commonly used.
When it comes to micro-SaaS, workforce management is one of the most popular applications. This type of software makes it easy for businesses to keep track of employee hours, schedules, and absences. It can also help with payroll and HR tasks.
Marketing automation is another excellent micro-SaaS category. Tools in this category can help businesses with email marketing, social media management, and lead tracking tasks. They make it easy to manage complex marketing campaigns and track their results between users.
Customer Relationship Management (CRM)
CRM software is another essential micro-SaaS tool for many businesses. It helps companies track customer data, interactions, and sales opportunities. There are many different CRM options available with different pricing tiers, allowing businesses to find an application that meets their requirements.
Many businesses offer online courses to help people learn new skills or improve their current ones. This is an excellent application for micro-SaaS because it can be scaled up or down depending on demand. For example, the e-learning platform TruAcademy offers three tiers of pricing to users, each with different access levels.
Micro SaaS Success Stories
It’s excellent to understand some popular micro-SaaS ideas, but what about when they’re actually put into practice? Here are three examples of successful micro-SaaS applications.
Shopify is a Canadian eCommerce platform that helps businesses create and manage online stores. It started as a small-scale micro-SaaS platform, designed as a simple tool to help people create their own online stores. Now, Shopify has grown into a full-fledged e-commerce platform, used by over half a million businesses worldwide.
Slack is a messaging app for teams organized by ‘workspaces.’ It allows users to communicate with each other through chat channels and has become incredibly popular among businesses and organizations. In less than two years, Slack has acquired over 2 million users due to its narrow focus and straightforward functionality.
Zendesk is a customer service software company that helps businesses manage customer support interactions. With over 50,000 customers in more than 150 countries, Zendesk is one of the most popular customer service software platforms in the world. As a remote micro-SaaS application, it’s easy for businesses to manage customer support round the clock.
Should You Start a Micro SaaS Business?
Now that you understand what successful micro-SaaS businesses look like, should you start your own? This depends on several factors that you should consider.
You first need to consider what industry you want to start your micro-SaaS business in. Not every industry is a good fit for this type of business, so do some research to see if it’s appropriate.
Another thing you need to consider is your target market. Micro-SaaS businesses are best suited for companies with a small to medium-sized customer base. If you’re targeting a too small or too large market, your business may not be successful.
You also need to consider your competition. Micro-SaaS businesses are most successful when they have a unique selling point (USP), so make sure you know what your competitors are offering and differentiate your product accordingly.
Your Business Model
Finally, you need to consider your business model. Micro-SaaS businesses are typically subscription-based, so you need to make sure you can generate enough revenue to cover your costs. Otherwise, you may need to find other income sources, such as selling advertising space.
After reading this article, you should now understand why micro-SaaS is a popular choice for businesses across the US. This article covered:
- What is SaaS?
- What is micro-SaaS?
- Industry trends and data
- Benefits of micro-SaaS
- Drawbacks of micro-SaaS
- Popular micro-SaaS ideas
- Micro-SaaS success stories
- Should you start a micro-SaaS business?
Software-as-a-Service Development with Idea Maker
If you’re considering starting your own SaaS business but lack the technical knowledge required to develop such an application, consider hiring Idea Maker. We have an expert team of dedicated professionals ready to build a high-quality SaaS application. Schedule a free consultation with us today to learn more.