I wrote a post a few weeks ago that every company wants to be technology company. Over the past few weeks I’ve realized that every company also wants to be a SaaS company as well.

The realization started a couple of years ago. I was working with a digital transformation company providing implementation services to the healthcare industry. Supporting efforts around Epic integrations, Workday, and other healthcare specific tech. They were about 25M in revenue…that had to be sold again year in and year out. They were in process of developing some of their own basic applications to sell to the health systems rather than just doing implementation work.

Another capital markets company recently developed various technology for their own inhouse use and is primarily a services business. But their tech would be valuable to others both vendors and competitors. They are looking at which tech to make available to others and how.

Last, an outsourcing contract developer I recently spoke with is working to decide which of their efforts in the capital markets tech space can be sold as SaaS products to take advantage of the the industry trend to replace aging infrastructure, OMS, risk, etc. The other thing driving contract development firms to product is the acceleration of AI and low/no code applications.

Oh I almost forgot. Large consulting firms are acquiring work flow solutions, payroll, supply chain, capital project estimating software and even CRM systems as they morph into SaaS firms that also provide consulting.

Indeed software vendors also can’t remain only software vendors in capital markets. They will increasingly provide contract services. As AI is truly agnostic and ubiquitous, it will enable connecting platforms with ease to drive automation. As a result vendors will need to expand their products.

In the end, the ecosystem will favor the incumbents but only if they can innovate quickly. I anticipate however, many firms coming from contract or core services will need to pick their battles. Its easy to think you have a solution in capital markets but the reality is that there is an enormous amount of nuance customized into applications that will be hard to replace if software vendors stay on top of their game.