SaaS and the Growth of AI

by | Feb 25, 2021 | Technology

It is hard to avoid conversations surrounding AI in the technology space, but there is continuing confusion as to what exactly AI constitutes. While the number of companies building AI technology and utilizing the technology increases, the definition of AI remains loose. Many businesses are happy to label their technology as being powered by AI when in reality the impact is minimal and their applications are heavily supported by humans.

This being said, SaaS and AI are often painted as being on a collision course, with AI companies capable of creating technologies that will perform the duties of SaaS applications and platforms. In the future, many believe that our applications will be replaced by question-and-answer-based voice applications, which would depend on complex AI to formulate their responses. The reality is probably less bleak for SaaS companies.

SaaS companies that have built solid customer bases can often act as loading bays for AI technology. AI acquisitions like those by Anaplan and Salesforce show that AI and SaaS are able to complement one another. We are already seeing AI tools like automated meeting schedulers, customer service bots, and data cleaning services taking the tedium out of many office roles, freeing people up to work on more pressing tasks.

So, what other advantages will AI bring to SaaS in 2021 and beyond?

Data Security

SaaS companies have experienced rapid growth due s to the accelerated rate of technological adaptations by organizations, but this growth has also led to threats in data leakage and abuse. Given the fact that SaaS operations are largely run online, SaaS offerings come at a greater risk. A SaaS company’s main priority should be in detecting risks or vulnerabilities as quickly as possible to protect their customer’s data. 2021 will likely see an increase in focus on AI-based vulnerability detection and mitigation in order to avoid security breaches.

Sales Boost

Sales teams tend to spend far more time qualifying leads and doing simple administrative tasks than they do closing leads. The amount of time that could potentially be saved by having AI check leads against long and complex lists of criteria could give sales teams a much-needed boost. If one was in any doubt of this, Salesforce has claimed that successful sales teams are 4.9x more likely to be using AI than unsuccessful ones.

Marketing Automation and Campaign Evaluation

A major area for AI to innovate and save working hours is in the less creative marketing activities. Choosing when to respond to emails, creating tailored responses, and conducting customer surveys are just a few things AI could help with. With so much to choose from, and AI already being used to save marketers time, we can expect marketing departments to be positively affected by the rise of AI.

Not having to spend so much time reporting on the success (or lack thereof) of a campaign would probably justify SaaS spend in one quick swoop.


AI can keep tabs on a person, see what content they have interacted with, and match it against any other profile data. These activities can allow the right AI-endowed SaaS tools to create personalized experiences for customers, only showing them what will keep them engaged and converting.

Personalization of the online experience has long been touted as the next step in website evolution, and it could be AI that allows for an unprecedented depth and complexity to the personalization process.

Predictive Analytics

This is perhaps one of the most discussed use cases of AI. The idea that AI will be able to remove the job of analytics specialists and produce its own proscriptive reports is a holy grail for entrepreneurs. To be able to predict, even in broad strokes, what will happen to a business based on the data it currently collects is the sort of competitive advantage that can’t be ignored. When people talk of a fourth Industrial Revolution, it is technology like this that they are referring to. SaaS analytics and data visualization tools that can use AI to this effect will have an extreme competitive advantage.

The Competitive Edge

One problem that arises from the growth in AI technology is how fast the top 5 cloud companies are able to react to new innovations. While smaller SaaS companies may strive to build a product that makes use of AI, a company like Microsoft or Amazon is able to build freemium versions of the same tools. This need for the Big Five to cover all their bases and watch out for all emerging opportunities is suffocating some smaller SaaS businesses. The ability of these businesses to invest heavily in AI and develop a competitive advantage over otherwise innovative SaaS competitors can be a cause of concern for SaaS entrepreneurs, although growth in larger tech companies can breed confidence in the SaaS market as a whole. To avoid a larger company turning your niche product into a free add-on (see how Google Data Studio is threatening the data visualization market) one needs to ensure there is a genuine competitive edge and unique IP.

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