The SaaS industry has already seen tremendous growth in the last seven years, and by the end of 2023, it's expected to reach $208.1 billion. This growth rate is 17.5 percent more than that of 2022. However, it won't slow down anytime soon; instead, AI integration and machine learning will take the SaaS industry to a whole new level. So, if you want to know more about AI in SaaS and its benefits, let's dive into the details!

What is SaaS?

Typically SaaS is a licensed software delivery model in which the applications are hosted on external servers instead of in-house. A cloud service provider accommodates applications and provides them to the end-users over the internet. You can also name SaaS applications as hosted software or web-based software that are hosted, managed, and maintained on the servers of the application or software provider.

According to Exploding Topics, around 60% of businesses in the US use SaaS. Companies usually prefer SaaS because it saves them from the upfront cost of software installation. Moreover, SaaS applications reside in a shared environment, meaning the overall hardware and software cost will be way less than the traditional setup. It makes it possible for small businesses to access high-powered and on-demand software at a minimal cost.

Also read: Here are the Ten Reasons to Get Yourself a SaaS for Real Estate

Features of SaaS

SaaS wrap ups many exciting features that make it popular among businesses of all sizes. Let's have a look at them:

  • Has upfront and subscription-based billing that ensures transparency.
  • Doesn't provide device-specific usage or services, and you can use SaaS applications on any device and platform easily.
  • Overall, simple to use and can easily analyze large amounts of data.
  • Real-time updates are given so businesses can stay on track and achieve their objectives.
  • A simple onboarding process ensures you get the best out of SaaS and reach high productivity levels.

Artificial Intelligence SaaS

As the name suggests, artificial intelligence is concerned with creating machines capable of performing and augmenting human-associated tasks or even beyond. It's also known as using technology to build smart or intelligent systems that can simulate human intelligence. Typically, artificial intelligence uses machine learning and deep learning algorithms to extract data and predict results.

TechJury shows around 35% of companies use AI, while 42% are learning AI for future implementation. Popular platforms like Amazon Alexa, Siri, or Google Home also use AI. Not only this but the recommendations given by Netflix to users based on their interest is also made using AI technology. The AI-based SaaS helps businesses to automate many operations and provide valuable data to users.

Machine Learning SaaS

While many confuse artificial intelligence with machine learning, these are two different terms. Machine learning is actually a subset of artificial intelligence and is available in many SaaS applications. It enables machines to make decisions based on past experiences or histories without being programmed.

You will find this technology in Online Recommender System, Facebook Auto Friend Tagging, Google Search Algorithms, etc. For businesses, SaaS and Machine Learning couple together to enhance users' experience.

How will AI Revolutionize SaaS?

AI SaaS has significantly impacted the business sector and continues to do so. It's among the quickly growing IT industry categories and will keep expanding in the following years. Here are some of the compelling reasons that will tell you how AI in SaaS can revolutionize the industry:

Paves Way for Automation

The critical change that AI in SaaS brings is its ability to automate many repetitive organizational tasks, freeing employees to focus on more critical ones. For instance, an AI-powered chatbot can deal with customers' queries 24/7, which reduces the workload on your customer support team. Moreover, AI in SaaS helps positively impact the user's experience by giving quick and informative answers.

Another worth mentioning fact is that AI or machine learning SaaS also reduces your expenses and saves you from the hassle of hiring additional employees. All you have to do is distribute the simple tasks to AI-powered SaaS applications and direct your human workforce toward challenging milestones. In addition, being a SaaS company, you can use AI to automate manual processes, such as data entry, email management, etc.

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Provides Predictive Analytics

Businesses often use predictive analytics to determine customer trends and design marketing strategies. These analytics are predictions that share what the future may bring for the company based on historical data.

SaaS companies used to hire predictive analytics for this job who keep a close eye on customer behavior and how to retain them.

However, in this regard, AI in SaaS is playing a vital role nowadays. Its powerful technology shares future insights based on historical data, data mining techniques, and machine learning. For example, AI can be used to predict which products are likely to be popular in the future or which marketing strategies will be most effective. In addition, the machine learning feature quickly notifies you when a customer withdraws and reduces churn.

Increased Security

SaaS companies have seen immense growth in the previous years, and almost 70% of the business apps are now based on SaaS technology. Unfortunately, this has also given rise to multiple cybersecurity threats looming around businesses, especially SaaS-based ones. As SaaS operations are run over the internet, they are at greater risk of being attacked by hackers. Therefore, SaaS providers must implement top-notch security measures to ensure their customers' data stays secure.

That's where AI in SaaS helps them, as AI can quickly detect unauthorized activity and oppose attackers' actions. AI and machine learning also learns from human behaviors and identifies anomalies to guard your data against malicious activities. Oracle, which uses an excellent machine learning algorithm to monitor your software's security, is an example of how AI in SaaS improves security.

Fraud Prevention

With the increase of digitization, ill-intention people also have updated their methods of deceiving systems and scamming people. But with effective utilization of machine learning, SaaS businesses can easily detect, report, and oppose such activities. For instance, AI can easily learn customer behaviors and follow their transactions. So, whenever something variates from a customer's normal spending behavior, AI will intervene to ensure only a legitimate person is acting.

AI can detect and share flaws in both cybersecurity and financial setups of SaaS businesses. On top of that, AI can also share insights on how to overcome these issues.

Allows Personalization

According to Shop Circle, around 80% of consumers purchase from a company that offers personalized experiences.

Creating personalized marketing campaigns or sharing relatable content can help you build good and lasting customer relationships. However, many organizations still either rely on manually generated personalized campaigns that take a lot of time and effort or go with a general marketing campaign that doesn't attract customers. But don't worry, as no-code AI helps you with this.

AI in SaaS closely monitors what customers do and which content they interact with. Moreover, it uses the collected data to develop content as per user preference to ensure they only get to see what they want and stay engaged. Consumers will likely purchase from your business when they get the desired content. Because personalization evokes emotions, and emotions significantly impact human buying decisions.

Worth checking: SaaS Vs. On-Prem Software: Which one Will Be The Right Option For Your Business?

Better Customer Support

Companies often focus so much on their interface and dashboard that they forget entirely to activate an efficient customer support service. This diminishes the overall user experience and may result in losing potential audiences. However, even if sometimes the company focuses on customer support, they lack a dedicated team to attend to queries.

In this case, AI in SaaS can lend a helping hand and automate the whole customer support process for you. For instance, you can get an AI-powered chatbot to cater to customers' queries and guide them throughout their interaction with your business. Moreover, you can also combine AI with human force to provide a more robust customer support experience to the end users.

Improved Marketing

AI in SaaS can help companies improve their marketing efforts by focusing on customer interests and behaviors. SaaS companies can use machine learning algorithms to analyze customer data to develop targeted marketing campaigns that increase customer engagement and boost conversions.


AI in SaaS will undoubtedly strengthen the SaaS market and enhance its dominance in the business world. It'll allow companies to adopt automation, offer excellent customer support, and have better data security. So, if you are searching for the best SaaS service provider, look no further than Apptension!

We have top-notch digital products and SaaS software featuring modern technology that caters to different business needs. Moreover, we make you our partner throughout the product or software development journey to ensure you hit the target market correctly. So, get in touch now to have your AI SaaS business solution!