From Software as a Service to Service as Software: How AI is transforming the way we buy and use software

The world of Software as a Service (SaaS) has been a game-changer over the last decade. It all began with the rise of Salesforce and the widespread adoption of cloud technologies, and its impact has been enormous. Take marketing technology as an example: in 2011, there were only about 150 tools available. Fast forward to 2024, and there are over 14,000. SaaS has revolutionized industries, but now we’re on the brink of an even bigger shift, fueled by AI.

First, let’s take a step back and understand what made SaaS such a big deal. Around 30 years ago, getting new software was a logistical nightmare. You had to physically receive it on disks or hard drives and install it locally on your computer. Updates and fixes? Those meant sending new disks to customers—an expensive, cumbersome process. Then came cloud technology, and with it, Salesforce introduced a better way: software in the cloud, maintained remotely. No installations, no shipping, no headaches. Everyone could access the same software from anywhere, and the pricing model changed too. Instead of paying upfront for software and maintenance, customers subscribed—paying monthly or yearly, with the option to renew.

Kobi Blyer.

SaaS brought incredible benefits. For businesses, it was a dream: no need for local offices, physical distribution, or huge maintenance teams. Everything lived in the cloud, making it easy to collect usage data and learn how customers interacted with the software. Frequent updates kept the product fresh, adding more value for users while boosting revenue. Customers loved it too—no large upfront costs, less risk, and the ability to pay only for what they used.

But now, a new paradigm is emerging. With AI, we’re moving from “Software as a Service” to “Service as Software.” This shift transforms software from something static—used the same way by everyone—to something dynamic, adaptable, and personal. Companies are beginning to sell not just software, but services: fast, precise, and tailored to each user’s needs. That’s where AI steps in, enabling software to deliver a service-like experience that feels personal and intuitive.

AI-powered software is reshaping how businesses work. It streamlines processes, serves up smarter insights, and even handles tasks—or entire workflows—for users. This doesn’t mean AI will replace employees; rather, their expertise will become even more critical. Employees provide the knowledge and context AI tools need to combine internal company data with publicly available information, producing unique insights and smarter decisions. The result? A major competitive edge.

This shift is changing how software companies make money, too. Instead of charging a flat fee for a license, they’re starting to bill based on the actual service provided. The better the service, the higher the price—because the value is clear. Salesforce, for example, now charges $2 per interaction for its AI-powered tools. It’s a model that reduces risk for buyers while letting vendors charge more for high-value offerings.

We’re just at the beginning of this transformation, but the implications are huge. AI is pushing software into a new era, one where it’s no longer just a tool—it’s a true partner, making work faster, smarter, and more effective. For businesses, this means new opportunities to innovate, and for users, it means software that truly works for them. The future of software is here, and it’s all about delivering service.

Kobi Blyer is VP Marketing at Rivery.