The service-as-software model is nacsent but expected to be experimented with in different fields as artificial intelligence techniques improve and enable new applications.
However, slapping AI + {category} + service-as-software should draw reasonable skepticism. There are market constraints that will make adoption more difficult. There are capability gaps that will make solutions incomplete.
So when does it makes sense for service-as-software?
Completely replaces a function or role
Of course taking an established function and selling a service that will replace someone’s job is not going to sell, but supplementing high-demand areas is viable. For example, there are more job openings for engineers than there are qualified people to fill them which creates demand for AI employees that can do the job fully.
Performs work that wasn’t done before
There are only so many hours in one day and there is work that is not financially viable to do but people want. For example, not every business can afford 24/7 support that can resolve customer issues but they certainly would like to. This latent demand could be tapped into at the right price point which would be infeasible even for a low-cost offshore vendor operation (which is notoriously hard to get right).
Other examples:
- Penetration testing which typically happens annually
- Monitoring and reviewing logs of critical systems for insights
- Hard to compile reports like annual business reviews
The outcome is clearly defined
The unit of work the service is delivering is ideally measurable and matches how the customer defines success. When the unit of the work is the outcome of the intent, outcome-based pricing aligns incentives clearly. This probably wouldn’t work if you define the outcome too generally (what would be the unit of work of HR?) or the job is a negative art. You could use a proxy measurement, but the further away from the real value, the less clear it becomes.
(Some ideas drawn from A System of Agents brings Service-as-Software to life)
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Service as software is the inverse of software as a service. Rather than building software for people to do their job, service-as-software uses AI to fulfill the intent directly and more faithfully sell solutions not software.