In a groundbreaking report, “The Future of AI SaaS in India,” WestBridge Capital in partnership with Upekkha, highlights the transformative role of Generative Artificial Intelligence (Gen AI) in the SaaS domain, presenting a lucrative opportunity for India’s tech industry. According to Gartner, global technology spending reached $4.8 trillion in 2023, with an annual growth rate of 8%, forecasting a jump to $11 trillion by 2033. A substantial portion of this expenditure was allocated to IT services and software, including a $250 billion investment in SaaS.

Gen AI is reshaping the software landscape, merging traditional IT services with the SaaS model into a cohesive “Software and Services” approach. This shift towards “Ambient AI” anticipates the integration of Gen AI into everyday life, revolutionizing enterprise processes and setting the stage for Artificial General Intelligence (AGI) within the next decade. The blurring of lines between business sizes promises a unified market landscape.

Rishit Desai of WestBridge Capital emphasizes Gen AI’s impact on enhancing UI/UX for businesses, optimizing workflows, and redefining enterprise application interactions. Thiyagarajan Maruthavanan of Upekkha views Gen AI as a pivotal platform shift, predicting a redefinition of software categories and emphasizing the shift from selling software tools to managing outcomes.

Crunchbase reports 206 AI Unicorns globally, with 14 focusing on Gen AI. The evolution toward Gen AI architectures signifies a potential threat to companies not adapting to technological advancements. Prasanna Krishnamoorthy of Upekkha sees India’s thriving SaaS industry as a fertile ground for AI SaaS, predicting the emergence of 100 new AI Unicorns, thus positioning India as a leader in the global AI arena.

The synergy of SaaS, AI, and India’s market creates unprecedented opportunities, particularly in niche markets or “white spaces.” However, challenges such as “hallucinations” or inaccurate AI outputs require careful consideration. The report advocates for a holistic reimagining of user experiences and workflows, underscoring the necessity for businesses to adapt strategically to Gen AI for sustained technological leadership.