The Future of Saas Best Breed of All-in-one Solutions

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The cloud-based software-as-a-service (SaaS) market is growing rapidly. With ever-evolving business landscapes, one of the critical decisions businesses must make is whether to go with a best-of-breed or an all-in-one solution.

It is not only about choosing a scalable, affordable, and interoperable technology. But, on the other hand, the solution should also offer the most value. So, businesses today face various choices and making the right decision has become a bit tricky.

Where best-of-breed solutions often require more integration work, they can be flexible to changing needs. They offer benefits such as easy implementation and domain-specific features.

But, such benefits are not only limited to them, and it is fair enough to say that all-in-one solutions have their own perks. Contrary to best-of-breed, they are comprehensive and simpler to set up and use. However, they might not be that flexible in the long run.

 

Let’s have a closer look at both of them.

 

Best-of-breed vs. All-in-one Solutions

Best-of-breed solutions are applications that are the best in their category. These solutions work well for businesses with specific needs and who want a high degree of customization. Take Salesforce and ADP as an example.

On the other hand, all-in-one solutions are platforms that offer a variety of applications all in one place. They are a good choice for businesses that want a comprehensive solution but with less customization. An excellent example of an all-in-one solution is HubSpot.

But what to expect from both of these SaaS solutions in the near future? Let’s dig into the details.

 

Best-of-breed Software

Micro-SaaS founders are working wonders in the software industry. No-code development platforms are rapidly becoming popular. As a result, the focus of many people has shifted towards identifying a business pain point and building profitable solutions around it.

What’s more, it has opened doors to multiple opportunities for businesses to explore and expand. No matter your business problem, you will always find a dedicated SaaS product to overcome it.

But there is another side to it as well. When it comes to the software industry, it is a market where the situation is more of a winner-takes-all. In this case, the solution that offers maximum functionality is more likely to take over, making others obsolete.

So, although it might seem that best-of-breed solutions are going to stick forever. Considering the ever-changing business needs, there is no denying that businesses will eventually run into a brick wall. By the end of the day, they will be looking for a solution with versatile functionality.

Aside from this, there are a couple of inherent problems with best-of-breed solutions that should be kept under consideration.

Problems Pertaining to Best-of-breed Software

To put it simply, purpose-built solutions are easy to create, market, and maintain. However, they lack many features essential for today’s successful business operations when observed from a utility perspective.

Here’s how.

Lack of Collaboration Capabilities

First and foremost, since best-of-breed software is mainly optimized for a particular individual or functionality, it eventually isolates others from the process. The end results can be chaotic since there is no collaboration between teams.

Curious to know how? Well, think of it like this. Say, for example, you are running a business where your GMT teams prefer working with software like Asana or Trello. Whereas on the other hand, your engineering team has its own preferences. Let’s assume JIRA as an example.

Now, since both of these teams are working on different softwares, there is no transparency and collaboration between them. This is where things get complicated as your teams lacks visibility and access rights to critical data stored in a software within your organization.

So, what happens next? Yes, you have guessed it right. This ultimately leads to team conflicts and hurdles in the business process, hindering your growth.

 

Fragmented Customer Experience

Another problem to consider when implementing a purpose-built solution is fragmented customer experience. How? Well, in using best-of-breed solutions designed for specific niches, teams can only analyze data from their perspective.

In doing so, they usually fail to notice the big picture. Now, since teams have a myopic understanding of consumers, they eventually end up delivering a broken customer experience.

Think of this as an example. Your sales and marketing team is using a live chat widget installed on your website’s home page in order to capture lead data.

On the contrary, your customer support team utilizes a different chat tool installed on the help page of your website to deal with support requests.

So, when a customer approaches your support team to follow up on a complaint that he/she registered with your sales and marketing team about a product, what do you think will happen?

The answer is simple. The customer support representative will have no idea about what the issue was. The end result? Customer repetition and duplication of complaint registration pertaining to a similar issue.

Administrative Difficulty

Moving forward, having too many solutions eventually means you’ll need a workforce of similar caliber and a handful of resources to manage them effectively. For example, if your marketing team requires access to a particular tool that your engineering team utilizes, trust me, that will be a hassle for you.

How? You might wonder. It is simple, you will have to go through the trouble of buying new licenses, and your IT team will have to provide access to all the marketing team. But that’s not it; more licenses mean more security risks and administrative hassles.

On top of that, your IT administrators will have to customize the tool per the marketing team’s requirements. On the contrary, using a single tool saves you the trouble of going through this complicated process.

Expensive

Although buying best-of-breed software may seem cost-effective, this is actually not the case. As your business grows, you will probably hire more resources. They will eventually prefer working on a solution that caters to their requirements.

As a result, you will end up buying more purpose-built software. Not to mention that you will also need to purchase new licenses to scale up your existing software’s functionality. So, in the longer run, you will be spending a lot of money.

Integration Issues

Moreover, it is fair enough to say that most best-of-breed solutions are not interoperable, and this is a major setback. Why? Because different teams use different tools, and in order for the systems to communicate effectively, integrating them eventually becomes a necessity.

Besides this, software integration has long been a business standard. However, managing multiple integrations, in this case, can be quite frustrating. Additionally, when compared to native integration, third-party API integration always leaves something out.

The end results? A poor customer experience. Although you may get the desired outcomes. But in the longer run, you will most probably end up hiring more resources to execute the task efficiently.

SaaS Fatigue

Purchasing and managing multiple best-of-breed solutions is a wearing task and eventually causes SaaS fatigue. In addition, the problems that come with the implementation of these solutions overwhelm organizations.

Best-of-breed Software: When to Buy

It is fair to say that best-of-breed solutions work like a charm when it comes to addressing single-user-based requirements. For example, ClassPass is a popular health club aggregator, and Evernote is an effective application for taking notes.

Similarly, Hyper Fury is a handy tool to use when it comes to scheduling and automating social media marketing. And these are just a couple of use cases. When you delve into the details, you will discover a long list of best-of-breed solutions that are in fact, pretty efficient.

It is because of the same reason that micro-SaaS applications are growing rapidly and will continue to dominate the B2C domain. But as effective as they might seem, there is a limit to their functionality.

When it comes to multi-user requirements such as collaboration or communication, best-of-breed applications are not that effective. For example, when considering collaborative work, it is evident that multiple people will need to use the application. And this is where they break down.

Moreover, purchasing a best-of-breed or an all-in-one solution also depends on the company’s growth stage. For startups, standalone solutions are the best choice as they can easily fulfill their requirements.

However, for a more mature organization, the preferred choice is an all-in-one solution. It is because they constantly strive for an improved customer experience while ensuring seamless data flow within their internal teams.

So, if you are a startup focused on solving an immediate problem at hand with the best tool to get the job done, best-of-breed software is your best choice. But, let’s not make it a one-sided discussion. All-in-one solutions do come packed with a handful of benefits.

Let’s dig into the details.

 

All-in-one Solutions

Simply put, all-in-one solutions are designed to satisfy all of your business needs while simplifying your workflow and saving the extra hassle and costs. They allow collaboration and communication between departments to ensure maximum productivity.

In choosing an all-in-one solution,  well-positioned businesses can utilize a single platform to address various business needs. The licensing costs are lower, and the employees get to use a single-user interface that is easy to familiarize themselves with.

In addition, the integration efforts of IT resources are considerably minimized, and you can streamline uniform workflows through end-to-end data management. As a result, your overall productivity increases significantly.

 

Getting curious? Let’s dig into the pros of all-in-one SaaS solutions.

 

Benefits of All-in-one Solutions

Here are a couple of benefits all-in-one solutions offer.

Unified Customer Experience

Unlike best-of-breed solutions, where the customer experience gets fragmented, all-in-one solutions offer a more unified customer experience. It is because they offer seamless collaboration between your internal teams while simultaneously offering a unified brand experience to your customers.

Since the teams can easily collaborate, they have a more detailed understanding of the customer’s complete lifecycle journey along with other valuable insights. Therefore, the risk of fragmented customer experience is eventually reduced since data flows freely across the teams working on a common software platform.

Reduced Administrative Hassles

With all-in-one solutions, the administrative hassles of your IT teams are considerably reduced since they only need to set up and deploy the solution once. It then becomes a lot easier for them to manage tasks, including but not limited to password policies and license renewals.

Cost-effectiveness

Costs are an important factor to consider whether you are a startup or are running a more mature organization. In this case, you most probably will not prefer to spend a lot of money on a single SaaS product.

All-in-one solutions, on the other hand, come packed with a hefty amount of features and at a lowered cost. What’s more, you do have the option to purchase only the required features and leave the rest out. Unless you really need them, there is no need to buy them.

Enhanced Collaboration

Best-of-breed apps cannot facilitate workplace collaboration in the same way that all-in-one platforms can. With all the other benefits an all-in-one SaaS solution offers, enhanced collaboration is without a doubt the most important one.

Businesses require a highly collaborative environment to function adequately. This is why such platforms perfectly fit in with their requirements.

But that’s not all. From a vendor standpoint, all-in-one SaaS solutions also offer a couple of benefits. Let’s take a closer look at them.

 

Benefits of All-in-one Solutions for SaaS Vendors

From a business standpoint, developing a horizontal SaaS platform has a compelling case. Creating all-in-one applications means that software companies can expand into new markets and generate new revenue streams.

Flexible Adaptability

Since the software industry is a winner-takes-all market, many software companies eventually shut down their businesses or change their target market with increased product saturation or when there is a threat from a bigger competitor.

In this case, having an all-in-one product foundation gives your company a financial cushion. You can analyze and combat market risks while transitioning to identifying a new feasible target market.

Increased Market Capitalization

When it comes to profiting in a vertical SaaS market, you have to face a couple of challenges. For example, tight competition, customer acquisition costs, or an unprofitable customer base. Considering this, the only way you can profit is by upselling premium subscriptions to existing customers or acquiring new ones which comes with its own challenges.

However, if you build a horizontal SaaS platform, it opens up doors to multiple opportunities. Given that your platform offers support for a couple of products, you can easily expand your customer base without spending additional costs on new customer acquisition.

Your solution will eventually make your customers dependent on it, resulting in a reduced churn rate. What’s more, this will also help you improve your customer loyalty and lifetime value.

Reduced Competition Risk

Last but not least, considering that all-in-one SaaS solutions offer a wide range of functionality, you eventually get that competitive edge over niched-down solutions. Initially, you can offer one of your products either at a competitive price or free cost. Once your user dependency increases, you can ultimately upsell or cross-sell.

You might wonder, what are the chances that best-of-breed solutions might evolve into all-in-one solutions in the future?

Well, here is a logical explanation.

Can Best-of-breed Solutions Evolve Into All-in-one Solutions

Initially, every all-in-one platform starts as a point product. It eventually expands to accommodate more functionalities based on customer demand and market trends.

However, is what required here is to have an all-in-one product mindset right from the beginning if you intend to envision your software’s future among all-in-one platforms.

For example, it was easy for solutions like HubSpot, Shopify, or Rippling to advertise themselves as an all-in-one platform, although they added more capabilities to their core solution in the later stages.

Why? Because they started with an all-in-one product mindset from day one. However, this is a luxury that vertical SaaS companies cannot afford to have, given that they do not envision an all-in-one future for themselves.

Conclusion

Best-of-breed solutions will always be available, irrespective of the ever-increasing demand for all-in-one software. For example, healthcare and government markets have a strict set of requirements to meet that otherwise are not possible using an all-in-one platform.

However, since SaaS users work in a more collaborative environment, best-of-breed tools that lack interoperability are more likely to become obsolete. Therefore, when it comes to the future of SaaS solutions, all-in-one platforms are something you can safely bet on.