Forget SaaS: The future is Services as Software, thanks to AI

For over two decades, Software as a Service (SaaS) has been a cornerstone of the tech world, with applications accessible entirely over the internet. However, the rise of artificial intelligence (AI) is reshaping this landscape by leveraging applications to autonomously deliver services. This new paradigm is dubbed "Services as Software."

AI is carving out a fresh frontier for tech professionals and businesses. Frank Diana, a futurist at Tata Consultancy Services, recently highlighted this shift, stating, "Historically, businesses bought software and hired human professionals to operate it. AI is flipping that model. Increasingly, businesses will design their processes around AI from the start -- not as an add-on, but as the default worker. This shift will impact nearly every function."

An HFS survey reveals that 60% of 1,000 surveyed enterprises are already eyeing services as tech offerings. The same percentage plans to replace some or all of their professional services with AI within the next three to five years.

Similar trends are evident in routine IT maintenance, HR, procurement, accounting, and customer service, which "are becoming much easier to replicate with advancing generative AI and agentic software, supported by public and private cloud capabilities to secure and scale transaction volumes," according to HFS authors Saurabh Gupta and Phil Fersht.

Tasks that once required teams of specialists are now increasingly handled by AI-powered systems capable of executing tasks autonomously, Diana explained. "This transformation isn't just about automation -- it's about redefining how businesses consume and deliver services. The emerging model marks a profound departure from the past: software is no longer a tool for human workers; in many cases, it is the worker."

This shift heralds significant changes in the roles of tech professionals. "SaaS models primarily revolved around cloud-hosted applications," Diana told ZDNET. Services as Software "incorporates intelligent technologies such as AI, digital twins, predictive analytics, and autonomous systems, requiring professionals to pivot from infrastructure management to the orchestration of dynamic, adaptive services."

This transition underscores the need for professionals to realign their skillsets, Diana continued. "Prioritizing AI literacy, strategic thinking, and human-machine synergy is crucial. Adapting to new career paths focused on orchestrating integrated service ecosystems and enhancing cross-functional collaboration will be essential."

To prepare for this shift, Diana urged technology professionals to "embrace continuous learning, deepen their proficiency in AI and automation, and sharpen soft skills such as communication and problem-solving." By doing so, tech professionals can position themselves as strategic enablers of business outcomes rather than merely technical facilitators.

Despite the surge in automation, human expertise remains vital, Diana emphasized. Oversight and ethics are crucial, as "AI requires human governance to ensure fairness, compliance, and security." Additionally, while AI can process data, humans will provide context, vision, and leadership.

Gupta and Fersht also highlighted the challenges faced by technology and business professionals as services and software converge. "Services and software people come from different worlds and speak different languages, but now these need to come together in a way we can all understand and develop," they noted. "We can't simply buy shiny new S-a-S solutions and plug them in like we did with an ERP solution. This is where we need to define real business value, which can be delivered by AI technology and priced according to that value and the desired outcomes we expect."