The Software as a Service (SaaS) model has revolutionised the way we work and has become one of today’s most popular business models. As of 2022, Gartner estimated the SaaS space to be worth over $195 billion, approximately a 500% growth since 2015. And right now, some of the biggest names in technology are operating on SaaS models; for example, Salesforce, Zoom, and Dropbox.
In such a booming space, it’s the ideal time for SaaS companies to start looking to grow their business internationally. However, even for the most experienced executives, taking an organisation across borders is a daunting task. There are multiple challenges to consider, including navigating SLAs across multiple time zones, reliance on local partners to deliver consistent, quality service, and multi-currency transactions.
However, there are steps a company can take to ensure international growth goes as smoothly as possible. Here are the top three:
Right place, right time
International expansion is a major decision and should be treated as such. It requires a significant investment of time and resources. Therefore, the first step is to carefully identify the right place and time for growth. An organisation should evaluate its existing customer base and analyse the market demand for its product or service in other countries. Becoming experts in the target market’s unique characteristics, such as preferences and competition, can help determine the feasibility of international expansion.
Businesses then need to assess what infrastructure will be needed to facilitate the move. This includes having the right technology, logistics, payment processing, and customer support systems in place. The company should also be aware of any legal and regulatory requirements in the target market, such as data protection and privacy laws. Building a strong foundation before expanding internationally will increase the chances of success and reduce the risk of failure.
Partnerships can be a game changer
Creating strong partnerships with people in the country is another critical success factor for SaaS companies to grow internationally. Finding the right partners who understand the local market and culture can be a valuable – often critical – asset. Local partners can provide accurate insights into the market, help navigate cultural differences, and facilitate business relationships with potential clients.
Expanding globally means thinking globally
Last, but certainly not least, it’s vital to be aware of the cultural differences you may encounter during international expansion. It’s important to research and be sensitive towards the cultural differences and norms of the target market. Expanding into a new market means encountering new languages, communication styles, and business practices/etiquette. There may even be a need to localise the product in some way to meet the unique needs of the new market.
It is also important to learn the specific laws and regulations of the new territory. For SaaS companies, data protection and privacy laws will likely be the most relevant, but there are numerous regulations to adhere to, including taxation and labour laws. It’s vital to keep compliance front of mind, because the penalties for falling below the required standards can be hefty. Not only will there likely be financial losses to deal with, but a compliance scandal can cause huge reputational damage to an organisation.
International expansion is a challenging but rewarding opportunity for SaaS companies. However, careful planning, research, and the right infrastructure in place can greatly increase the chances of overseas success. If done right, the sky is quite literally the limit, and SaaS companies can reach new markets, increase revenue and establish themselves as a global presence.