In full swing this year, the historical triggers of application innovation — economic and geopolitical disruption, market disruption, and technology advancement — accelerate software as a service (SaaS). 

"Digital dragons," the household names and hyperscalers leading app development, join disruptors as the fourth trigger driving the next wave of tech. Small- and mid-sized SaaS companies should look at what those businesses have in common as they drive future strategy, according to Paul Saunders, senior director analyst at Gartner, during a Gartner IT Symposium/Xpo Americas session Monday. 

Digital dragons include companies such as Microsoft, Amazon and Google, which change what organizations previously thought possible in the digital space. The innovation spurred by those companies advance and influence how people work, business capabilities, scalability, and elasticity across the application market, according to Saunders. 

While each business brings a new value proposition to the market, each also relies on a common set of characteristics. Powerful ecosystems with a mastery of data, strong digital talent, and massive research and development investments fuel digital dragon offerings throughout the supply chain in principles beyond tech, said Saunders. 

Instead of just looking in awe or intimidation at what these companies are capable of, small- and mid-sized SaaS brands can learn lessons to generate similar success. CIOs and IT leaders studying and implementing digital dragons in their strategies enable themselves as competitors, according to Saunders. 

Digital dragons help smaller businesses deliver software without delay. "The elastic delivery is where the digital dragons really come in. They enable you to deliver. We don't have to think about it's going to take me 12 weeks to get a server stood up, you can commission infrastructure at the drop of a hat," Saunders said. 

Learning from digital dragons stretches beyond tech implementation. Understanding how SaaS companies changed the application landscape provides insight into strategic fixes that companies can make in the coming year. 

Saunders calls this a sense of humble disrespect. This means "looking at yourself, your organization, your industry, your competitors, and saying, 'is there a way that we can do things better?'" Saunders said. 

Digital dragons drive success through a laundry list of habits, including: 

• Strong vision

• Minimum viable management

• Making people a top priority

• Long-term focus

• Prioritizing innovation. 

For small and mid-sized companies, many of these tenets are ultimately centered around employee management. 

The technology should be there to enable the people, not replace them, according to Saunders. Instead of pushing people away when things get challenging, management should clear obstacles to enable the workforce to move forward. 

Meanwhile, customers now demand a digital experience. "For those of us who've been fortunate to survive so far through this pandemic, and the businesses surviving, what we have realized and what we're seeing here at Gartner is customers saying digital it's not an option, it's a must," Saunders said. 

Brute force and determination won't be enough to keep small and mid-sized SaaS companies afloat in the coming year, according to Saunders. Customers and leadership now expect the agility and speed offered by digital dragons at companies of all sizes.