The advancement of AI technology has led to a paradigm shift from Software-as-a-Service to Service-as-Software, creating a $4.6 trillion opportunity in the global services market. This shift means that companies selling services are now responsible for achieving the desired outcome rather than just providing tools for customers to use. Intelligent process automation is at the forefront of this change, with AI companies such as Eightfold, Tonkean, Turing, and Ikigai leading the way.
Software has been a key driver of efficiency and productivity in enterprise companies, with the software market growing rapidly over the past decade. However, the next wave of innovation will see software disrupting the services market as well. The integration of AI into software systems has the potential to automate work that was previously handled by highly skilled workers, presenting a significant opportunity for AI disruption to have a far-reaching impact.
The potential for AI to automate both full-time positions and services in enterprise companies is enormous. Businesses are now shifting towards outcome-oriented approaches where the cost of software is aligned with its associated business value. AI-powered companies are encouraging more usage of their products, as this helps them gather better data and provide more value to their customers.
In areas such as sales and marketing, software like Salesforce has traditionally helped boost productivity by organizing workflows for human workers. With the introduction of AI, productivity levels are set to soar as AI-powered agents can perform tasks autonomously and make complex decisions. This shift towards AI-powered services has the potential to revolutionize industries and transform how work is executed.
While the rise of AI-powered services does not necessarily mean the end of the Software-as-a-Service model, it represents a significant evolution in the way services are delivered. Different business models may coexist and thrive in various markets, with some companies choosing to outsource functions while others keep them in-house. The integration of AI into services means that companies are constantly learning and evolving alongside technological advancements.
Overall, the convergence of automation, services, and AI represents a once-in-a-lifetime shift that is revolutionizing the business landscape. Entrepreneurs operating at the intersection of these technologies have a unique opportunity to disrupt traditional business models and drive innovation in their industries. Foundation Capital is supporting startups at the forefront of this change and encourages entrepreneurs to join the movement towards AI-powered services.
