Why-SaaS-companies-must-acknowledge-AI(source: SaaS Industry)

Why SaaS companies must acknowledge AI: The role of AIaaS

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At a Glance

AI- SaaS integration has led to a significant drift in the community, so much so that it became one of the trending topics for SaaS in 2020. SaaS companies, upon implementing AI, avail numerous benefits, thanks to AI’s data-driven features. Big names in the industry are already using it. The article touches on some advantages of the same


Industry 4.0 is already here and has taken the world by storm. When AlphaGo defeated Lee Sedol, those who bet on the latter were taken aback. When self-driving cars entered the game, people were even more surprised, but it grows more natural with each day they as most of them might be using Amazon’s Alexa as well. Hence, it is no surprise that automation has found its way into many industries today and remains well-poised to delve deeper, setting the stage for Industry 5.0 eventually.

Coming with its entry is a change in the status quo, often perceived in a pessimistic tone. Take the advent of SaaS, for instance; with it, enterprises were able to effectively counter the many problems surrounding on-desktop/premise software maintenance and implementation, which eventually led to its surge. Similarly, enterprises investing in AI are seeing its advantages and adopting it.

As AI takes over industries, SaaS companies will also be under its radar. Various reports and blogs have shed light on intensity and the extent of the impact, and also the need to embrace the technology rather than fearing it. While AI companies pose tuff challenges to SaaS companies, it is to be noted that SaaS companies have welcomed some of its benefits, leading to the emergence of AIaaS, AI-as-a-service. 

Where do the challenges lie?

The challenges range from the very features of AI to its prowess. They pose problems to a SaaS provider. For instance, one commonly known feature registered on people’s minds about AI is automation. AI needs data. In fact, machine learning (ML) and AI run on user data, which can then be used effectively for a lot of things by an enterprise that invests in AI, such as customer engagement. While SaaS companies face problems in keeping their customers engaged, customer Service AI platforms and features such as chatbots are aware of attending to customer inquiries, troubleshoot problems at the start itself, and help customer service departments take on more inquiries than normal.

Then comes the pricing model challenges for SaaS companies that generally follow the motto of ‘more users, more revenue’ or the “per-seat” license model. However, a company that uses AI technology that can streamline and automate end-user experience with software, can eventually lead to fewer people accessing it. Such a system can make SaaS companies shift from the per-seat model to a usage-based model, thereby causing a disruption. A research by Gartner substantiates the discussions on the disruption. 

As AI automates work tasks that are traditionally performed by people and challenges the definition of “user,” named user pricing will come under pressure, thereby significantly jeopardizing software and SaaS providers’ user-based revenue streams

The Gartner-researched impact states

Why embrace?

Reports have suggested that SaaS companies adopt these solutions instead of going head-to-head with them. While AI-tech’s long-term applications are evolving and have miles to traverse, it is best for those features to be turned into an asset rather than a challenge. The benefits are many. For instance, machine learning coupled with natural language processing makes SaaS companies kick customer personalization up a notch. With inbuilt AI-backed features that analyze user actions, the software can configure user interfaces with the knowledge of what users want.

A company’s frontline departments can also benefit from AIaaS. As AI relies on data and can procure massive amounts of it, a business’s sales team can have more time on hand to close leads and dedicate most of their time to accurately qualified leads. The same goes with marketing teams too. AI helps in collecting pertinent data on consumer trends and other user behavioral patterns, making it easier for businesses to offer products and services that customers want. Lastly, AI helps make predictions on user behavior. Negative feedback and probable mistakes can be avoided with its help.

Riding on the back of futuristic opportunities, the trend of AI-SaaS integration has already been hailed as one of the top trends for SaaS in 2021. Like mentioned before, several SaaS companies have begun to use them in their business. Some big names such as Grammarly, which uses real-time language and grammar recommendations to the user using an AI-enabled text editor, or even Amazon, which makes use of its AI for its entire SaaS model. Numerous other companies join the list, highlighting the significance of the drift

The trend is hence real and happening, and more importantly, unavoidable.

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