SaaS Slips into Service-as-a-Software as AI Agents Take Over
While some predict that software-as-a-service (SaaS) may be slowly dying because of AI, recent developments suggest that it is evolving instead—particularly in the fields of generative AI and agentic AI systems. In this new paradigm, the conversation revolves around AI agents replacing human roles, and doing the work, instead of us getting tools to deliver the outcomes. Manoj Gupta, the CEO of Plotch.ai, explained this in his LinkedIn post: “The focus moves from providing tools to delivering outcomes directly—from software as a service to AI agents replacing human roles.” He added that the target market is, therefore, becoming the “total salary paid” as AI takes over tasks traditionally performed by people. Gupta explained that a typical SaaS model is all about offering tools and services to companies over the internet. For example, Salesforce, HubSpot, Workday, and Slack provide companies with tools that help their employees perform specific tasks. Here, the responsibility of the task lies with the employee or the person using the tool or software to perform the task. Enter Service-as-a-Software Now, be it major providers like Google, AWS, and Microsoft, or others like Snowflake and Databricks, everyone is building AI agents to help companies reduce their team size and expedite tasks. It is almost like the salary paid to the workers now would go towards paying for the service of the AI agents, and the companies would be able to save money through this. This is because these service providers provide not just the tools but also the outcome. “Instead of a platform to do your taxes, you get an AI accountant that completes your taxes for you. Instead of a project management tool, you get an AI manager that handles timelines and resource allocation. This isn’t just an evolution; it’s a revolution,” Gupta added, hinting that these agents are much more than mere tools of assistance. This also brings forth the question of which vertical would these AI agents be positioned in later as they provide services now, and not software. Gupta argues that this has a huge potential in the $4 trillion services economy, instead of the comparatively smaller software-driven market. The Indian IT services companies are perfectly positioned for this revolution. After the recent partnership with Meta and NVIDIA, giants like Infosys are building solutions for their clients that are more than just tools; they are building AI agents for them. In its latest earnings call, Infosys CEO Salil Parekh announced that the company is creating small language models and multi-agent works for clients. “This shifts the way the clients approach their operations, allowing them to scale up more efficiently by automating significant parts of their processes,” Parekh added. Moreover, TCS is working with NVIDIA to create AI solutions using the latter’s NIM Agents Blueprints for sectors including telecommunications, retail, manufacturing, automotive, and financial services. Its offerings feature NeMo-powered, domain-specific language models that can handle customer inquiries and respond to company-specific questions across all enterprise functions, such as IT, HR, and field operations. What About the OG SaaS? This shift will definitely bring in new kinds of jobs while possibly reducing a lot of the current type. A decade ago, there were only 14 SaaS unicorns, today there are more than 400 of them. Interestingly, these SaaS companies are already shifting towards providing AI-as-a-service, which fundamentally alters the type of jobs. For example, though Cursor is currently a “software” offering, its capabilities are nothing short of an agentic framework for writing code. Cognition’s Devin, the AI software engineer, and Anthropic’s recent offering, Claude, which controls the computer, are excellent examples of AI doing all the work for you. As SaaS evolves in the AI era, agentic AI is poised to handle high-volume tasks, becoming more efficient and precise in its deterministic functions. While some companies are attempting to develop in-house AI capabilities, many are finding this approach costly and complex. As a result, there remains a substantial market for specialised SaaS applications that offer AI-enhanced functionalities, which is basically the new service-as-a-software model with AI agents doing all the job. So yes, AI agents are here to change the definition of SaaS forever, and SaaS unicorns, along with the Indian IT companies, are in for a long ride of building AI agents for their clients.
The Indian IT services companies are perfectly positioned for this revolution as they are all building AI agents for their clients.
The Indian IT services companies are perfectly positioned for this revolution as they are all building AI agents for their clients.
["AI Agents", "SaaS-based model"]
["Anthropic", "Go", "agentic AI", "AWS", "AI", "SaaS-based model", "AI Agents", "Databricks", "generative AI", "small language models", "R", "Snowflake"]
["AI", "generative AI", "agentic AI", "Anthropic", "small language models", "AWS", "Snowflake", "Databricks", "R", "Go"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.