Bye Bye - Software as a Service (SaaS), Hello VaaS or AaaS or TaaS?

At the outset, title is a clickbait. But on a more serious note, Are we at the end of the SaaS business model and beginning to toe with a new business model? Call it “Value as a Service”(VaaS), or “Agent as a Service”, “Task as a service (TaaS)

Lets look at the context of why SaaS thrived and flourished in the first place.

Backdrop of SaaS was and continues to be the environment where we had enterprise user personas which we often classify as information roles in common parlence. As digitization of information ushered, These information roles were created to broker and drive value creation within businesses. They further accelarated and thrived as more and more businesses came online and digital first businesses became an investment hype across categories. SaaS across categories became the ideal tool to help information roles create and mine the value. As the cost of management and operations was real and often complex with nuance, SaaS businesses stayed clear of owning that part of the complexity (rightfully so).

There are multiple drivers which may be seeding this new trend. A few of these are technological and and a few others a related to behavorial and safety and privacy related.

Let us look at the technological changes first.

AI Agents is poised to have a transformative impact on future of enterprise roles and agencies of ‘value creation’ from information. Sanjeev Mohan and I wrote about it in our trends document (sanjmo.medium.com/unvei…) early this year. To our surprise, this has been far more exponential and steeper than we beleived or saw it coming at the time of writing in December last year.

The future of agencies and information roles is showing accelaration exponential accelaration with many information roles likely to be replaced by AI Agents.

1. AI Agents are expected to only become superior and take over end-to-end automation instilling far more intelligence and take on a variety of simple to complex information tasks, also the ones that need cognitive reasoning and making decisions like how human agents and agencies do.

2. This trend is likely to accelarate further as we get into 2025. Implications of this trend is, cost of management and operation of SaaS software which is currently owned by enterprises further drives down.

3. Serverless: With cloud we had given away management of our own hardware, but it initially started with businesses configuring their own VMs, storages etc. They wanted to ensure, they have the understanding of the machines they use, privacy etc. With more and more SaaS services going fully serverless, It further made IT hardware akin to a rental taxi model than ownership for longer duration. Your jobs run on server farms you aren’t aware of where they physically lie or what they look like. Businesses care less about owning software or even hardware and are ok with consumption model as long as value can be delivered by their employees.

Lets look at the behavorial and other noticeable shifts.

1. While enterprise data continues to be more valuable in owner’s mind. Employees or agents often don’t value data privacy and security and ownership of enterprise data as much as the enterprises themselves. This has led to a great amount of dilution in terms of what does “data privacy” and “security” even mean?

2. Biggest driver for “data privacy” and “Security”continues to be regulatory compliance and not necessarily employee behavior.

3. Cloud based SaaS services often touted as secure (each and every one has had a data breach over past 3 years) are considered drivers to innovation and the trade offs viz-a-viz data privacy are now more accepted when sharing data with SaaS vendor.

4. How many enterprises continue to share their data with SaaS players after news such as this thehackernews.com/2024/… or warnings such as

   I bet Most likely very few will react. If one were to turn the clock back by a decade or more, most likely these would be issues of very severe nature.

5. What has changed like employees, businesses are making trade offs viz-a-viz value vs ownership.

All of the above technological and behavioral changes have serious implications on how SaaS is sold today?

1. First and foremost, What does it even mean to build software for a specific persona? If the future lies in higher level automation of various tasks and low to mid complexity work performed by various information agents.

2. As cost of operations and management of SaaS drives down to zero, Vendors/Economics is steadily driving vendors towards offering Agent as a service(AaaS) or Task as a service(TaaS) or Value as a service (VaaS).

3. Could these be the models that replace SaaS in the next decade? What do you think?