Innovation in SaaS is solely dependent on your ability to increase the usage and adoption of your solution by your customers. Unlike traditional software, in SaaS you get to know the performance problems that includes both usability and user experience. This is also known fairly early in the cycle and being proactive here really reduces your infrastructure investments as well.

Additionally, with quarterly functional releases, and quicker feedback from the customers as they automatically get upgraded, SaaS products get evolved quickly.

Any vendor needs to focus their innovation on increasing value to their customers through increased adoption and satisfaction. The ones that are of key importance are improving user experience, providing functionality that will increase usage, providing ability for your solution to be integrated with best-of-breed applications of the customer’s IT ecosystem.

As long as you keep adding value to your offerings and in-turn to your customers, innovation will take care of it by itself.