SaaS firms redefine workflow, pricing models with AI adoption

Chennai: Software vendors' are experimenting with newer product offerings and pricing models as they integrate artificial intelligence (AI) models and AI agents. Industry experts said software as a service (SaaS) companies are realigning their entire product workflows and this is testing the current pay per seat software subscription model. Chaitanya Chokkareddy, co-founder and CTO of Ozonetel said AI provides advantages to the incumbent SaaS companies with data but stressed the need to reinvent product offerings. "Simply adding features like writing email will not work, so you have to change your whole process in software for agentic automation." He said the current pay per seat pricing model is under threat. "The pricing model is still evolving and companies are experimenting with paying for the agentic framework; paying for usage where they pay based on tokens or minutes and outcome-based models such as closing a lead or resolving a support ticket," he said. Prasanna Krishnamoorthy, managing partner Upekkha, an AI-based SaaS fund and accelerator said the current software purchase pattern of buying software for verticals and stitching together does not work well, he said. "With AI you get closer to delivering the outcome, you may need to do things outside silos…When adopting AI, SaaS entrepreneurs and enterprises should think differently and that is going to change the pricing models, which will vary for different use cases," he added.Suresh Sambandam, CEO of Kissflow and part of SaaSBoomi, a community of founders, said AI is a fundamental technology shift and companies are figuring out monetisation models. He said, "AI adoption is disrupting the business software market and similar to the cloud adoption, if a company fails to adapt in the right way they might lose market share." Sambandam further added that the Indian software market is expected to grow from $20 billion to $100 billion by 2035 and presents a good opportunity for domestic SaaS companies.