AI Pushes Software Firms Toward 5-Point Services-as-Software Shift
Updated
Updated · ZDNet · Jul 22
AI Pushes Software Firms Toward 5-Point Services-as-Software Shift
3 articles · Updated · ZDNet · Jul 22
Summary
Gupta and Fersht say AI is not killing SaaS but reshaping it into a hybrid "services-as-software" model that blends software delivery with implementation and business transformation.
90 days is their benchmark for AI projects to show commercial impact, arguing enterprises still cannot deploy AI at scale because of technology, data, process and talent debt.
That gap is driving convergence: services firms are becoming more software-like, while software vendors are moving deeper into outcome-based work; IBM is cited as a model of the mix.
Recent results support the case that incumbent vendors remain resilient—Salesforce posted $11.1 billion in quarterly revenue, up 13%, while software and services groups still grow about 5% with 15% to 20% margins.
The view contrasts with earlier fears that AI would hollow out SaaS, suggesting vendors that pair AI with deep client relationships and measurable business outcomes are better positioned.
As AI makes building software easy, what hidden maintenance costs are enterprises dangerously overlooking?
AI lets companies build their own tools. Which software categories now face an extinction-level event?
Building custom AI is now simple, but who is liable when these autonomous agents inevitably fail?
From SaaS to Agentic AI: The $500 Billion Market Transformation of 2026
Overview
In early 2026, the SaaS industry faced a dramatic upheaval known as the 'SaaSpocalypse,' marked by a sharp correction in market values and a major shift of investment capital. Leading SaaS companies in the U.S. and Asia saw their share prices drop significantly as investors recognized a fundamental change: artificial intelligence, especially agentic AI, was transforming how business workflows and software value were defined. Despite these disruptions, global SaaS spending continued to rise, showing that while the market was evolving rapidly, enterprise demand for intelligent, AI-driven solutions remained strong and central to future growth.