AI is the new SaaS (Service-as-a-Software)
From HyperBundle in SaaS to Mr. Steal your Job, AI enables a new breed of SaaS
One of the most intriguing discussions in AI right now is how it can enable the creation of a whole new category: "Service-as-a-Software."
These LLM-powered AI agents can read and interpret structured and unstructured content, generate output, set priorities, and direct tasks, much like a skilled human delivering a service.
This unlocks significant equity value as investors begin underwriting these opportunities, especially since these same investors (myself included) have typically avoided businesses with a large "professional services" component.
Shoutout to Foundation Capital for their insightful article on this (linked in the comments). They estimate a $4.6 trillion opportunity ahead for Service-as-a-Software, almost 3x the market cap of all 65 SaaS companies in the Bessemer Venture Partners EMCLOUD Index.
Not all revenue streams are created equal, right?
The irony here is that AI is the new SaaS, and SaaS isn’t dead or slowing down. Quite the opposite, SaaS is compounding, as it always has and always will. We're only in the 25th year of the cloud-based revolution, ever since Salesforce was founded in 1999.
It makes me think about how AI is becoming like electricity: essential to run almost everything in a company, yet quietly ubiquitous. No one asks, "What's your electricity strategy?" or “Why aren’t you building it in-house?”. AI will soon be an abundant commodity sourced from a few big providers.
Anyone familiar with this topic interested in collaborating on the discussion?