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SUNDAY, October 01, 2023

From SaaS to AI-as-a-Service Business Model: Embracing to Unlock New Competitive Advantage

From SaaS to AI-as-a-Service Business Model: Embracing to Unlock New Competitive Advantage
WEDNESDAY, May 03, 2023

Adobe, Amazon, Alibaba, Baidu, Google, IBM, Microsoft, Oracle, Salesforce, Tencent, and other leading digital service providers have transformed from SaaS (software-as-a-service) to AIaaS (Artificial Intelligence as a Service). How do businesses embrace this opportunity in order to become an AI-driven enterprise to unlock new competitive advantage?

With the most promising new trends of AI in the world of business and the rise of AI-as-a-Service allow companies to tap into the power of artificial intelligence (AI) like never before.

As businesses look for ways to stay ahead of the competition and unlock new competitive advantages, many are turning to AI as a key enabler to succeed in business. 

However, implementing AI can be a complex and resource-intensive process, which is why many businesses are now turning to AI-as-a-Service solutions without having to invest in costly in-house technology and expertise like many businesses have used SaaS before. 

For example, Adobe, one of the largest software companies in the world, in 2012 transformed its business model from selling packaged creative software such as PDF, Photoshop, Adobe Illustrator, InDesign, to cloud subscriptions by providing the SaaS. Later, in March 2023 Adobe unveiled Firefly, a family of creative generative AI models coming to Adobe products.

“With Firefly, Adobe will bring generative AI-powered ‘creative ingredients’ directly into customers’ workflows, increasing productivity and creative expression for all creators from high-end creative professionals to the long tail of the creator economy.”, said David Wadhwani, President, Digital Media Business, Adobe.

Figure: Amazon, Microsoft & Google Dominate Cloud Market (Source: statista)

In 2003, Amazon launched ‘Amazon Web Services’ (AWS) as a web hosting service that provides an e-commerce platform for all size of business all over the world.

AWS is now the world’s leading cloud hosting service and one of Amazon’s top revenue earners with more than 1 million active users including enterprise-scale customers, and small and medium-sized businesses.

Later in April 2023, AWS announces Amazon Bedrock and multiple generative AI services and capabilities which is an AIaaS

In the past 20 years SaaS changed how we lived and worked, now it’s the era of AI with AIaaS that will take over SaaS seamlessly and the world still evolving into something new like we’ve never imagine before.  

One major competitive advantage of the SaaS business model is providing subscription and outcome-based approach with the ability to provide predictable, recurring revenue streams while also focusing on delivering measurable results to establish long-term relationships and encourage continuous improvement which lead to increase customer satisfaction and loyalty.

Whereas the AIaaS business model offers unique competitive advantages over SaaS, including access to advanced capabilities, customization, cost-effectiveness, scalability, access to expertise, and ultimately, increased revenue through AI automation.

By embracing this new paradigm, businesses can transform their business model to unlock new competitive advantage in the age of AI whether using new capabilities from AIaaS providers and/or to be an AIaaS provider.

Where will you be in this AI-driven world?