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Building with SaaS

We’re seeing a new pattern emerge in how software is built.

10 years ago when companies had a business problem to solve, they typically started with a build vs buy decision. i.e - is there existing software on the market that can do exactly what we need? If yes, let’s list out options. If not, let’s recruit a software company or have our technology team build it.

The SaaS industry in 2021 is estimated to be a $145 billion dollar industry. That means more and more business processes are being covered by existing saas products on the market, for just tens or hundreds of dollars a month - you’re able to stitch together several services to get things done.

Here’s why that’s important. Building software from scratch is traditionally expensive, late, and a long process that requires commitment and cash.

What building software does accomplish is providing a business with exactly what it needs, fully customized to their business.

So on one hand you’re able to stitch together a bunch of saas products and get things done but it’s not customizable, although quick and affordable. On the other you have completely custom solutions that take time and money, but provide you with exactly what you need.

Both options are not ideal. The solution is a hybrid model of development.

When we’re approached with a new project, lately we’ve been initially focusing on breaking it up into sub-services. Think sending emails - that’s an example service where existing products can be found to integrate without having to build it from scratch. But for every small business, there’s typically an internal process that is unique to that business.

The internal process is where we like to focus our efforts for custom software.

New projects end up with a single custom module that encompasses unique elements of the business process, and several integrations to outside systems to cover standard processes. Systems would communicate via APIs and webhooks.

We see this as the way forward for building software - which means there will be a major focus on API development (creation and consumption), saas integrations, and moving to micro-service based architectures. What this means for businesses is faster development, and generally better functionality across the spectrum where integrations with specialized software leads to better, more complete functionality within that category.

Gone are the days of building internal email services, internal HR platforms, or accounting & billing systems.

In are the days of building a small service or component that brings business value to your customers or stakeholders, and ties into 5, 10, or even 20 other systems to provide the basic support services that users demand. Think authentication, billing, analytics, notifications, and reporting services.

Takeaway

Software companies benefit from planning for the medium to long term future. Having the right foundation means a company can scale quickly and make sure that product market fit can be achieved without delays. The wrong foundation will incur technical debt, which will cause product delays and lead to inefficient software teams.

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Macro Trends that are Shaping the Future of Software

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Product Led Growth