Software-as-a-Service (SaaS) may be facing threat from artificial intelligence (AI) but India’s SaaS companies have the capability to adapt, Girish Mathrubootham, Founder, Freshworks said on Tuesday.
“People are saying SaaS is dead. Yes, SaaS in its current form may be dead but does that mean we will stop dreaming or cannot adapt?” Mathrubootham said at the annual SaaS conference SaaSBoomi held in Chennai on Tuesday. “We [India] are also told we can’t build world-class AI from here. We may not have access to the GPUs or the market for it, but we have a young, hungry and aspirational workforce willing to learn,” he said.
Mathrubootham urged founders to “throw away” their old SaaS roadmaps and reimagine their companies as if it’s day 1 and go after agentic AI.
Speaking to businessline on the sidelines of the event, Mathrubootham and other SaaS executives identified a few key trends shaping the future of SaaS.
One key disruption they noted is the reinvention of the SaaS sector’s pricing models. While software companies have historically charged a license fee based on number of users of the company, pricing models are set to change to being value-based.
“What was user-based license model will change to usage-based and consumption-based…We at Freshworks already have both pricing models for over fours years now,” Mathrubootham said. “SaaS companies can charge for outcomes delivered using AI but no more for just offering AI features,” he added.
Krish Subramanium, Co-Founder & CEO of Chargebee said that newer start-ups “without a baggage” will find it easier to adapt to the new pricing model. “Outcome-based pricing is already happening in the market. Pricing is an under-utilised strategy for SaaS companies to differentiate themselves as the market gets crowded,” he said.
Another trend is of SaaS companies that built their proprietary models before OpenAI or Claude came along now finding themselves disrupted by AI native start-ups. “Competition was always there. But incumbents still have access to revenue, capital, large customer data and workflows. With GenAI access also democratised they can still adapt,” Mathrubootham said.
SaaS executives also stressed on increasing opportunities for scaling a vertical SaaS businesses compared to the domination of horizontal SaaS companies till now.
Others spoke about how using AI in their own operations will help SaaS firms build better products. “AI will let you build 10X better products,” Rajan Anandan, Managing Partner, Peak XV Partners, said at the event. With AI SaaS also being an investor darling, Anandan also noted a sharp rise in deal sizes at the early and seed stages.
SaaSBoomi is a community of over 6,500 founders today and the event this year has been one of the biggest for the organisation with more than 2,200 delegates applying to be a part of this conference. The two-day event brings together founders, investors, and other experts to share their playbook on building SaaS products for an AI future.
SaaSBoomi also launched a new initiative BoomiAi to expand its community work to AI start-ups
