The evolution from SaaS (software-as-a-service) to Artificial Intelligence-enabled SaaS is currently underway and is adding almost $60 billion net new TAM (total addressable market) to the sector, industry executives said on Thursday at ‘SaaSBoomi 2024’, a two-day event organised by software products community SaaSBoomi to facilitate VC meetings and host discussions around building global AI SaaS products from India. 

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“Generative AI is already 2 per cent of technology spending in 2023 and GenAI penetration is set to hit 10 per cent in the next 4-5 years. This is 3x faster than the growth of SaaS alone in the tech world,” Noshir Kaka, senior partner, McKinsey & Company, said in his address at the annual gathering of the IT products community.

The opportunity to add AI and machine learning functionalities to existing software products is already being seen in areas such as virtual customer agents, co-pilot solutions across verticals and functions, workflow augmentation and conversational interfaces, Manav Garg, founder of software firm Eka, and a governing council member of SaaSBoomi, said. “At VC firm Together Fund [where Garg is a partner], we are seeing close to 75-100 AI SaaS firms pitch to us,” he added.  

An industry report by SaaSBoomi and McKinsey in 2023 showed that India is set to have more than a hundred SaaS unicorns by 2030 with an enterprise value of over $500 billion. Currently, India is estimated to have around 3,500 SaaS startups and 20+ unicorns.

Dheeraj Pandey, formerly the CEO of global cloud firm Nutanix, who has now turned founder with CRM software for developers DevRev, said that GenAI is what cloud computing was around 15 years ago--only bigger. “More than 95 per cent of India’s SaaS revenue is global in nature and people relationships will play a key role in creating generational companies,” he added. 

Executives at the event noted that the India-US SaaS corridor will continue to remain relevant and get stronger as B2B SaaS firms leverage AI. 

“India will continue to play a key role; companies will continue to build out AI capabilities for their products out of here and market it to the world,” Krish Subramanian, co-founder and CEO of US and Chennai-based subscription management firm, Chargebee, said. “AI investment is mainly happening in three areas- across product features, customer connect and managing internal operations,” he added. 

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SaaSBoomi saw over 1,700 SaaS founders and executives register for participation from across India including non-metros such as Surat, Chandigarh, Nagpur and others.