SaaS and Artificial Intelligence

There are a variety of ways that SaaS & Cloud Services and Artificial Intelligence (AI) are interrelated. From one perspective SaaS businesses can use AI to help run the business. From another perspective AI can help support new SaaS & cloud products and services. As leaders of SaaS businesses it’s important to understand how AI can potentially impact your business.

Improving SaaS Business Processes

Applications with AI functionality can be used in running a SaaS business. Typically these will be commercially available applications with AI functionality not custom AI applications. Although enterprises are and will be developing their own custom AI applications this isn’t likely for SaaS businesses because of the size of the businesses and the investment required. The areas of a SaaS business that can potentially benefit from AI functionality include:

  • Customer success
    • AI powered chatbots
    • Churn prediction
  • Marketing
    • Optimizing digital ads & targeting
    • Customizing the prospect and customer experience
  • Sales
    • Sales forecasting
  • Security
    • Real-time detection and resolution of security threats
    • Analysis of past security breaches
  • Software development
    • Automated testing and bug detection

Although there are other areas where AI can help, these are artificial intelligence applications that are available today and are used in most SaaS businesses. However, the specific applications you currently use may not have the AI capability yet. For example, your CRM system may not have AI based sales forecasting and you may not want to change or add an additional application.

Investments in AI based business tools should be thought about as any other investment for improving business processes, they need to solve a business problem and give an appropriate ROI. Just because they are AI and that is a current trend doesn’t mean they are right for you or right for you at the present time.

SaaS and Cloud AI Based Product Features

AI is and can be a source of product features and new products for vertical SaaS providers. Whether this is appropriate for your business depends on whether AI can solve problems for your customers. If not, you obviously shouldn’t pursue it right now. But if it does solve customer problems then there are areas of your SaaS or cloud business that will need to evolve and change. Previously, I’ve addressed some of the changes needed to onboard AI based applications.

There are some things to consider when you’re evaluating whether to put AI into your vertical SaaS product:

  • What market you’re operating in, including what the competition is doing with AI.
  • If your SaaS product handles a lot of customer data, there may be opportunities for AI to deliver value to the customer when AI is applied to this data.
  • If you are already providing data services for your customers, there may be opportunities for enhancing these services.
  • Data services which use AI to provide insights across all of your customer’s data, not just from an individual customer, can particularly beneficial.
  • IOT based SaaS business have a lot of AI opportunity because of the abundance of data and that many of these applications are new applications areas. AI based prediction and analysis fit very well in this market.

AI services can also be provided as part of SaaS or cloud services in horizontal applications by being part or all of an AI solution. There is a big market opportunity for providing these services and although the large cloud providers will have an advantage on the common type of services there will still likely be opportunities to provide niche solutions either independently or as part of a large cloud provider’s marketplace.

The large cloud providers, such as AWS, Azure & Google have entire sets of services that provide AI functionality without having to develop the machine learning algorithms. This provides functionality in an application with limited amount of required knowledge of machine learning. These provide opportunities for you as a SaaS provider to incorporate functionality into your product and I’d suggest understanding the services available from the platform that you use. That may trigger some ideas to incorporate into your product.

To summarize, there are a variety of opportunities for using AI services as a SaaS provider and you should investigate those opportunities. There are also many opportunities to incorporate AI into your products. Currently there is substantial overlap between the SaaS and the AI market and it will be interesting to see how the overlap evolves. I believe in the future that AI-as-a-service type applications will become a significant percentage of the SaaS and cloud market.

–Paul–

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