In 2024, HFS Research coined the term Services-as-Software (SaS) to describe a seismic $1.5 trillion market shift where services are no longer delivered through traditional labor-driven models or inflexible software platforms—but as intelligent, AI-powered productized solutions embedded directly into business operations.
In this webinar, HFS leaders Phil Fersht, Saurabh Gupta, and Tony Filippone broke down what this evolution means for enterprise leaders looking to break free from legacy contracts, technical debt, and stagnant sourcing models.
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Key Takeaways
- Services-as-Software is real and rising. SaS is a fast-emerging category blurring the lines between software and services. Frustrated with labor-heavy delivery and rigid SaaS platforms, organizations are turning to AI-led, platform-enabled offerings that deliver outcomes, not effort. As vendors codify services into scalable products and pricing shifts to consumption models, SaS is rapidly emerging as a $1.5 trillion market force.
- Geopolitical tension and tariffs are accelerating the move to AI and SaS. According to HFS data, over half of enterprises (54%) are significantly investing in AI and emerging technologies in response to global economic and political pressures. At even modest tariff levels (10–15%), organizations are already shifting toward automation, AI, and vendor renegotiation. As tariffs increase, the pressure mounts to rethink delivery models, regionalize services, and codify IP into scalable, AI-enabled solutions.
- Process readiness must be a prerequisite to AI success. According to HFS data, the #1 challenge to achieving business goals is process inefficiency (35%), not tech limitations (16%). Poor workflows, lack of automation, unclear strategic direction, and governance gaps hold organizations back far more than outdated systems. To scale AI effectively and unlock the real benefits, organizations must stop obsessing over AI tools and start rebuilding the operational engine.
- Invest in young talent to shape your identity. Organizations must resist the urge to hollow out their workforce in pursuit of short-term AI-driven efficiencies. Instead, they should focus on nurturing and developing young talent, as this is essential for maintaining a vibrant organizational culture and identity.
- Winning in the SaS era requires investing in the 3 Ps… and the battle has begun.
- Success in the Services-as-Software era requires enterprises to master:
- People: Blending humans and machines in new operating models
- Products: Codifying IP into scalable, repeatable software-like offerings
- Partners: Building agile ecosystems of tech and services collaborators
- The competitive lines are blurring:
- Software firms are “eating services”: Salesforce, SAP, and ServiceNow are expanding into outcome-based, AI-led offerings.
- Services firms are “eating software”: Accenture, IBM, Publicis, and others are codifying services into platform-led products.
- Startups are emerging as disruptors, offering AI-native, plug-and-play solutions (e.g., Writer, Rhino.AI)
Ready to Explore Your Services-as-Software Strategy?
The $1.5 trillion Services-as-Software shift isn’t a trend—it’s a transformation. Whether you’re navigating legacy tech, redefining your operating model, or scaling AI across the enterprise, HFS can help you lead the change—not chase it.
Let’s connect and reimagine what enterprise services can be.
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