How AI is Reshaping the Future of SaaS

Generative and agentic AI are revolutionizing the software-as-a-service (SaaS) industry by automating tasks and replicating workflows. From drafting code in Cursor's AI code editor to handling support tickets in ServiceNow, AI is already making significant inroads. The cost of foundation models is plummeting while accuracy improves, signaling a future where routine digital tasks shift from "human plus app" to "AI agent plus API."

Key Scenarios for SaaS Disruption

SaaS providers face five potential outcomes as AI integrates deeper into their ecosystems:

1. No AI: Workflows remain unchanged.
2. AI enhances SaaS: AI boosts productivity without replacing human roles (e.g., Procore’s project cost accounting).
3. Spending compresses: AI penetrates workflows, risking value migration (e.g., HubSpot’s list building).
4. AI outshines SaaS: AI-driven automation grows the market (e.g., Guidewire’s claims adjudication).
5. AI cannibalizes SaaS: AI replaces SaaS workflows entirely (e.g., Intercom’s Tier 1 support).

Strategic Priorities for SaaS Leaders

To navigate these disruptions, SaaS executives must:

• Embed AI deeply: Automate customer-centric tasks before competitors do.
• Leverage proprietary data: Unique data sets (e.g., Workday’s HR workflows) are critical moats.
• Shape industry standards: Lead in defining semantic layers for agent interoperability (e.g., Anthropic’s Model Context Protocol).
• Rethink pricing: Shift from seat-based to outcome-based models (e.g., Salesforce’s AI-driven pricing).
• Build AI fluency: Equip teams to innovate and sell AI-driven value.

The Future of SaaS Stacks

AI is rebundling SaaS into three layers:

1. Systems of record: Core data repositories (e.g., regulated financial systems).
2. Agent operating systems: Orchestration tools (e.g., Microsoft’s Azure AI Foundry).
3. Outcome interfaces: User-friendly AI agents (e.g., Slack-integrated bots).

"Disruption is mandatory, but obsolescence is optional," the article concludes. By acting decisively, SaaS leaders can shape—not just survive—the AI-driven future.