The SaaS applications market is a dynamic mix of ISVs transitioning to SaaS and native or “born-in-the-cloud” SaaS businesses. The former, which has shifted from selling licensed, on-premises software to SaaS, represents the larger of the two segments. Many of these providers continue supporting customers running legacy licensed software, which presents opportunities and challenges, including migrating existing customers to SaaS and acquiring new SaaS-only customers.
However, native SaaS businesses, unencumbered by the demands of a legacy customer base, are often in a stronger position to fully exploit a cloud operating model. The research consistently shows that native SaaS businesses outperform transitioning ISVs across several important dimensions, highlighting the potential for success in the SaaS market. The findings offer an opportunity to examine and replicate, where possible, the characteristics and behaviors of native SaaS businesses.
