Pros and cons of AI

Why SaaS companies shouldn’t ignore AI: Benefits and challenges

Berta Melder
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As the market for AI grows, it’s time for SaaS companies to take a look at AI and its potential benefits and drawbacks for its use. In this article by Berta Melder, find out about the SaaS market, and how AI can help with automation, marketing, predictive analysis, and more.

Artificial intelligence is more popular than ever. Not so long ago, it was just another emerging trend but now this technology develops at a rapid pace, having numerous applications in different industries. For example, everyone knows about chatbots and AI-driven recommendation systems, such as the one used by Amazon.

As AI conquers more and more industries, SaaS companies also feel the impact of this technology. Gartner expects AI to change the SaaS pricing model, as customers start to use their own AI. As much as 40% of the SaaS companies with per-named-user pricing are expected to change their pricing models by 2025.

AI also introduces new standards of user experience. Customers expect effective and fast search, as well as voice-controlled interfaces. It seems like AI is a tough challenge for SaaS companies. However, not only does artificial intelligence introduce new challenges, but also numerous benefits that can make your company more successful. Many SaaS companies have already appreciated the benefits of AI, making market experts talk about the emergence of a new market segment — AI-as-a-Service.

The SaaS market now

According to IDC, SaaS is one of the slowest-growing segments of the cloud market, while also accounting for 68.7% of the overall cloud market. The state of the market from investors’ perspective is usually characterized by venture capital funding, and this indicator declines. The main reason is that the SaaS market has matured and now it’s oversaturated. Even though it’s still expected to grow, it will certainly grow at a slower pace so companies that want to withstand the competition with large players need to keep up with the latest trends.

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Big companies, such as Google, Amazon, and Microsoft, have already created numerous AI-powered solutions. Oracle has also expressed excitement about machine learning and artificial intelligence, stating that it will overtake salesforce in SaaS. The odds are that AI will be one of the main factors that will determine the state of the SaaS market.

Benefits and challenges of AI for SaaS companies

1. Automation

AI introduces countless automation opportunities. Companies can eliminate many repetitive tasks using machine learning, and chatbots that help customers quickly find answers to any questions are just the most common example of automation. Chatbots can provide the necessary links to a knowledge base, and the most advanced solutions can also analyze feedback, learning from their interactions with customers. This way, AI can save costs because businesses don’t need to hire additional employees.

One of the main challenges for SaaS companies is keeping their remote customers engaged. Chatbots help companies get closer to their customers, providing timely assistance at any time.

2. Sales

According to statistics, sales teams only spend 20% of their time closing leads while qualifying potential leads 80% of their time. A lot of research is necessary to understand what leads will likely lead to a sale and what will not. Fortunately, the qualifying process becomes much simpler thanks to AI. Given that AI can easily process massive amounts of data, sales teams can have more time on closing leads. Therefore, the overall productivity of sales teams increases, as they can dedicate most of their time to accurately qualified leads.

3. Personalization

Natural language processing and machine learning allow SaaS companies to move from personalization to hyper-personalization. AI can analyze your users’ previous actions, providing you with numerous actionable insights into their preferences and interests. Therefore, you can configure user interfaces knowing exactly what your users are looking for. Quite often, attempts to improve the interface end up with new features and functions that make it more complex. AI helps to make the adoption of new features easier for consumers.

However, these benefits also mean that companies that hesitate to adopt AI won’t be able to withstand such strong competition.

4. Marketing

AI-driven virtual assistants can help marketers collect data on consumer trends and behavioral patterns. The accurate analysis of data also makes it easier to offer products and services that consumers want.

AI also helps marketers evaluate the effectiveness of their campaigns. In addition, the use of more accurate information leads to better decisions, therefore increasing profits.

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5. Predictive analytics

Analyzing historical data, artificial intelligence can also make predictions regarding user behavior. It helps to improve the user experience even before negative feedback is obtained. In addition, AI can quickly notify you about behavioral patterns that indicate that your users are disengaged.


The benefits of AI for software development are obvious. Machine learning allows computers to perform a variety of tasks that would otherwise require too much time and effort, minimizing costs and increasing the overall efficiency of development processes.

At the same time, SaaS companies should understand that the benefits of AI will become challenges if they don’t adopt this technology. AI is a significant competitive advantage, and it can be the main reason why your main competitors outperform you. AI introduces new standards of user experience, which are impossible to meet without it. Therefore, we recommend that you don’t ignore artificial intelligence. It’s not just another trend, but the future of SaaS products.


Berta Melder

Berta Melder is a talented brand manager, currently associated with Masterra as a content marketing strategist. When she’s not writing, Berta manages the company’s internal training activities on branding. You can find her on Twitter.

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Roman SPD
Roman SPD
2 years ago

Thanks for this great read! As a part of the AI development company I was engaged in the project in this field, I can agree with everything you wrote here. Great job!