Analyst(s): Keith Kirkpatrick
Publication Date: October 7, 2024
Document #: AIESKK202410
Despite SaaS vendors’ collective push to quickly go to market last year with copilots and assistants, generative AI technology has yet to fully deliver on its promise of delivering significant revenue growth to these SaaS vendors. SaaS vendors are pivoting to AI agents to flip the script by providing ROI by using generative AI to address particular tasks and workflows. These agents make decisions and take actions with little or no human intervention. But will these agents, touted by nearly every large vendor in the market, be the catalyst for driving revenue from generative AI?
Key Points:
- Salesforce, Google, Hubspot, Microsoft, Oracle, and ServiceNow have been deploying AI agents designed to support intelligent automation of specific tasks.
- Each vendor has been touting the superiority of their agents, focusing on the promises of enhancements to productivity, efficiency, and consistency.
- The proper monetization strategy for AI agents will be a critical success driver for vendors as they seek to balance profitability against driving customer value.
Overview:
In September 2023, major tech companies, including Salesforce, Oracle, Google, Hubspot, Microsoft, and ServiceNow, launched their AI agents—intelligent bots designed to perform tasks autonomously based on company data with minimal human supervision. Although these AI agents showcase advanced technical capabilities, they remain in early developmental stages, primarily focusing on architecture and data management.
SaaS-Based AI Agents
Despite the rapid development of generative AI over the past two years, SaaS vendors have swiftly adapted to leverage this technology. The initial introduction of AI functionalities was through “copilots”—assistive tools to enhance productivity by managing tasks such as email generation and customer interaction summaries. However, organizations faced challenges in identifying practical use cases and measuring ROI, prompting a shift toward more specialized AI agents capable of executing specific tasks. These agents utilize APIs to connect with various applications, aiming to streamline simple processes such as expense reporting and data gathering, with plans for future customization to handle complex tasks based on organizational data.
Analysis
The surge in generative AI product launches in 2023 mirrors past technological races where companies rushed to claim market share. Although many vendors have unveiled similar AI functionalities, significant revenue growth remains elusive due to companies’ hesitance to adopt these technologies, which decline as AI agents gain independence from human users. This will prompt driven by concerns over their reliability and efficacy. Many vendors have adopted conservative pricing strategies, with some incorporating AI features into core products or utilizing flat fees for usage. The focus remains on introducing AI capabilities, leaving monetization strategies to be refined later.
Delivering Value to Enterprises and Vendors
AI agents are anticipated to enhance generative AI applications by effectively managing specific tasks, which could lead to improved ROI for both enterprises and vendors. The market is projected to grow at a CAGR of 9.0% between 2024 and 2028. Vendors are exploring various monetization strategies, including usage-based pricing, outcome-based pricing, and embedding AI into core products.
Figure 1. Annual Revenue, Text Analysis, Generation, and Summarization: World Markets, 2023-2028
However, the traditional seat license model may face a decline as AI agents gain independence from human users, prompting a re-evaluation of how SaaS is delivered and generative AI functions are priced. As AI agents prove their reliability, they may influence staffing decisions and reshape SaaS pricing structures.
The full report is available via subscription to Futurum Intelligence’s Enterprise Applications IQ service—click here for inquiry and access.
To learn more about AI agents, you can read the press releases and product information from Salesforce, Oracle, Google, Hubspot, Microsoft, and ServiceNow on their AI agent offerings.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
Zendesk Announces Outcome-based Pricing Model for AI Agents
Dreamforce Announcements Focus on AI, Agentforce, and Cloud Enhancements
Oracle Announces New AI-Powered Features for Fusion Apps
Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.