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Why AI Is About to Change SaaS Forever

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A huge AI-powered paradigm shift in SaaS (software-as-a-service) is getting attention online.

The concept is called "service-as-software." It's outlined in an essay from VC firm Foundation Capital.

The firm says that AI is causing a transition from software-as-a-service to service-as-software. That means that AI doesn't just give us access to software that makes us more productive. It gives us access to tools that act as brains that can perform services for us.

Instead of buying tools that make your brain more productive, you're now buying AI brains that can do the work for you.

We're no longer building software to help humans perform services. We're building software that can do the services itself.

So, AI isn't just going to come after the Salesforces of the world by building a better Salesforce. It's going to come after sales itself as a function and as a salaried role.

This, they argue, results in AI eating both software and salaries and services.

Salesforce makes $35 billion per year in revenue. But marketing and sales salaries total $1.1 trillion.

Says Foundation Capital:

"[...] the potential for AI to automate both full-time positions and services is enormous."

In fact, they estimate total salaries of jobs and services total $4.6 trillion globally.

If they're right, that has profound implications for both workers and SaaS companies.

How could this affect you, your role, and your company?

I got the answers on Episode 93 of The Artificial Intelligence Show from Marketing AI Institute founder/CEO Paul Roetzer.

Why you need to take "service-as-software" seriously

It seems like Foundation Capital's thinking is directionally correct, says Roetzer.

“We’re entering into the phase where the SaaS companies themselves can be thinking of their companies as part of the org chart, in essence as outside providers," he says.

"They’re not just selling the software, the tools to do the job. They’re selling you an agent that can do the job, so you don’t need an outside agency or party.”

This aligns with how AI leaders like Google and OpenAI are leaning into talk of AI agents.

“They’re positioning these as AI tools that can do things, can take actions," says Roetzer.

AI agents, though they're still early, carry the promise of doing bundles of tasks for us.

"A job is just a bundle of tasks," says Roetzer.

"As we follow these scaling laws, and if these laws hold, we will, in the not-too-distant future, have relatively reliable agents that can function doing many of the tasks that would make up a job.”

He says he doesn't hear enough from large enterprises acting to address this or think about it. The same goes for service providers like marketing agencies. (And Roetzer should know; he used to own one.)

Disruption is unlikely to start as one general agent that does the job of everybody, he says. But it's easy to envision lots of agents that do specific tasks. That includes AI agents for customer service, BDR roles, marketing, and more. The future could have many agents doing many different bundles of tasks within a company.

“Now, all of a sudden, it becomes very disruptive to jobs.”

And, if Foundation Capital's estimates are correct, the opportunity to disrupt jobs with AI is simply massive.

It reminders Roetzer of a quote from the book Automate This on AI innovation:

“Determining the next field to be invaded by bots is the sum of two simple functions: the potential to disrupt plus the reward for disruption.”

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