Michael Rabinowitz, founder and chief executive officer of CoEnterprise, explains why the rise of artificial intelligence is not a threat to software-as-a-service (SaaS).
There’s been talk that AI is poised to replace SaaS applications. Rabinowitz believes the opposite will happen. AI, he says, “is going to make [SaaS] more productive and useful for companies and for people.”
AI is a productivity tool that enables users to get answers to their questions much more quickly than by traditional methods, Rabinowitz says. Before, companies would have to drill down through a mass of information; now that’s summarized by AI.
In actuality, “we’re seeing companies buying more SaaS, now that AI is available, and getting more value out of it,” he says.
A wide range of applications delivered through SaaS stands to benefit. The initial use of AI was through chat, Rabinowitz notes — using prompts with natural language to ask questions. Now, for example, a human resources department can quickly learn the status of employees’ paid time off, without having to send an email or consult an HR manual.
The emergence of agentic AI only serves to increase the value of the technology, he says, enabling companies to automate billing, manage accounts receivable, and reconcile charges to income on the balance sheet, to name but a few core business processes. “The use cases just continue to grow,” he says, “from asking questions to actually performing a job function and doing it repetitively and quickly.”
In the short term, Rabinowitz says, AI will drive up cost as companies make greater use of it. Eventually, however, the cost will come down, as chips become less expensive, and that will further drive dependence on SaaS and the cloud in general.
