In The Enterprise, Innovation is Out. Digital Transformation is In.

Q: What are the next big trends in SaaS?

I think the new trend, which is brand new — is that “Innovation” as a reason to buy SaaS is dead. For now.  And maybe for 18+ months.

But … this will be combined with a rapid acceleration of Digital Transformation.

What do I mean? Well, the IT spend into SaaS has grown far faster than IT budgets overall in the past 5+ years:

A big chunk of that is because the CIO’s role has become over the past half decade, in large part, the Chief Innovation Officer. Either alone or together with a Chief Digital Officer.

CIOs were paid, and celebrated, for bringing “innovation” into older companies especially. They were heroes for finding new tools that improved efficiency.

That’s now all on hold. Cost-cutting and cost management has taken over. No CIO in Q2/Q3 of ’20 is getting kudos for the latest SaaS app that will improve productivity or even efficiency. She or he is now getting credit for saving money.

But at the same time, there is new urgency on Digital Transformation. Cloud Call centers, collaboration software, and much more has gone from the “innovation” bucket into the “Must Have Right Now” bucket during shelter-at-home.  Security needs and work-from-home needs are pulling forward SaaS and Cloud projects by years.

We are seeing rapid evolutionary change in the enterprise, pulling Digitial Transformation initiatives ahead by years in many cases.

But only where they make a difference, right now. When they are either necessary in this new world, or where they save tons of costs.

The rest, the nice to haves, the “innovation” apps … well that spend is now on hold.  If that’s you, you need to tilt.  You need to focus on the parts of your value proposition that enable the New Normal we’re living in now.

A deep dive on this with Stewart Butterfield, CEO of Slack, from last week:

Published on April 29, 2020

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