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U.S. SMBs are Hungry for AI and SaaS Tech
SMBs are increasingly adopting AI and SaaS technologies to enhance operations, boost revenue, and compete with larger brands, with many planning to increase spending on these tools to drive growth.
Industry Perspectives
June 14, 2024
4 Min Read
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This article is written by Kristjan Vilosius, CEO and Founder of Katana Cloud Inventory.
In today’s fast-paced and unpredictable business landscape, small and medium-sized businesses (SMBs) are navigating a complex array of challenges to compete with larger brands and big box retailers. According to the U.S. Small Business Administration, small businesses account for 99.9% of U.S. businesses. Yet, artificial intelligence and software-as-a-service technology companies are just beginning to tap into this vast, underserved market.
SMBs increasingly turn to advanced technologies such as AI and SaaS offerings to help them succeed. The businesses seek support in leveraging their data and the latest innovations on the market to streamline operations, boost revenue, and adapt to changing supply chain shifts while meeting consumer expectations. According to a recent Gartner forecast, global end-user spending on public cloud services will grow 20.4% to a total of $678.8 billion in 2024 alone, up from $563.6 billion in 2023, as the success rates make the technology indispensable.
North American SMBs are hungry for AI and SaaS tech. According to a recent 2024 Shopify and Katana Cloud Inventory E-Commerce report, 94% of SMBs intend to increase spending on SaaS technology, and 97% plan to incorporate AI into business operations this year. Moreover, 77% expect their e-commerce sales to grow this year – and of those, 14% expect growth to be significant. As 80% of SMBs raise prices to offset rising costs, technology plays a critical role in their growth strategies and in keeping their business aspirations alive.
Implementing AI and SaaS technologies offers numerous benefits for SMBs, especially in areas such as inventory management and operational efficiency. SMBs in e-commerce and manufacturing must ensure the right products are available at the right time, mitigate the risk of lost sales, and improve customer satisfaction. Inventory management systems provide real-time data analytics, helping businesses maintain optimal inventory levels. With or without AI, inventory software can forecast demand patterns, track inventory across multiple locations, and automate the reordering processes. Analyzing sales trends and seasonal fluctuations is where AI can take it a step further. With rising demand for easy-to-use software and quick access to data, AI can streamline the search for insights beyond dashboards and notifications and will slowly become the norm for data-heavy B2B SaaS offerings.
SaaS platforms are undeniably popular among SMBs, offering scalable solutions that are cost-effective and easy to implement compared to more feature-rich yet complex and costly enterprise systems. These platforms are lean and focus on best-of-breed integrations to centralize business functions, from customer relationship management to accounting and e-commerce. The flexibility of SaaS solutions allows businesses to customize their tech stack according to their specific needs, ensuring they only pay for what they use. And in doing so, SMBs can improve data accuracy and free up valuable time for their teams to focus on the strategic initiatives they need to grow.
The commitment of SMBs to increasing their technology investments reflects a broader trend toward digital transformation. As SMBs continue to adopt AI and SaaS technologies, we can expect to see more streamlined operations, enhanced customer experiences, and improved financial performance.
Investing in AI and SaaS technologies positions SMBs to compete more effectively with larger brands. These tools provide the agility and innovation necessary to respond quickly to market changes and customer demands. For example, AI can help SMBs optimize their supply chain operations, reducing lead times and improving delivery performance. Meanwhile, SaaS platforms offer continuous updates and new features, ensuring businesses stay ahead of the curve with the latest advancements.
The future of SMB success lies in the ability to embrace and invest in these transformative technologies. As the findings from the Shopify report indicate, SMBs are ready and eager to harness the power of AI and SaaS, signaling a promising future for technology-driven growth and innovation.
Kristjan Vilosius, CEO and Founder of Katana Cloud Inventory
Before Katana Cloud Inventory, Kristjan was the CEO of one of the largest investment firms in Estonia and had been an angel investor for nearly a decade in technology and manufacturing. He was excited by the impact of these two worlds merging and could see the need for a more modern solution to the outdated business suites of the ‘90s. With this inspiration, a 10-slide presentation became the beginning of Katana Cloud Inventory.
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