From SaaS to VaaS/WaaS: The Next Evolution in Business Models

From SaaS to VaaS/WaaS: The Next Evolution in Business Models

The recent critique of SaaS (Software as a Service) signals a shift in how software-driven businesses should operate. The premise that SaaS has reached a saturation point comes from growing commoditization, pricing pressures, and declining perceived value. The next wave of transformation—driven by AI and evolving digital ecosystems—is Value-as-a-Service (VaaS) and Work-as-a-Service (WaaS). These new pricing and service models offer a compelling path forward, particularly in the context of agentic systems and AI-driven workflows.

The Current SaaS Problem

Let’s first explore why the traditional SaaS model is under pressure:

1. LTV Compression: Customer acquisition is no longer a one-time event guaranteeing long-term revenue without constant re-engagement. Lower lifetime value (LTV) is squeezing margins, forcing SaaS companies to either innovate or become increasingly irrelevant.
2. Commoditization: As technology has matured, so has the ease of building and replacing software products. The result is a marketplace flooded with lookalike solutions, driving down the value of the code and making differentiation harder.
3. Difficulty in Monetization: Product-led growth (PLG) models, often heralded as the savior of SaaS, have fallen short for many companies. Companies struggle to justify their price points without a clear and compelling line-item ROI, making SaaS sales more challenging.

Enter VaaS: Value-as-a-Service

VaaS aims to address outcomes that pay for the value that the software creates. This paradigm shift is particularly suited for agentic systems, where AI and automation can directly link to business metrics such as revenue, cost reduction, and operational efficiency.

Here’s how VaaS can transform a traditional SaaS business:

1. Outcome-Based Pricing: Instead of pricing based on user seats or API calls, pricing in VaaS models is based on measurable outcomes such as reduced churn, increased sales, or operational efficiencies. The customer sees immediate value, and pricing becomes a shared upside rather than a cost center.
2. Automated Efficiency Gains: VaaS leverages AI systems to deliver constant optimization. For instance, predictive algorithms could constantly tune marketing campaigns, production lines, or customer journeys. Customers pay for improved results, not for software that helps them try to achieve those results.
3. AI-Driven Adaptability: One of the challenges of SaaS is that it's often rigid. Agentic systems and AI allow for adaptability, making VaaS a more flexible solution that evolves as the customer's business and market demands change. This constant evolution adds layers of long-term value.

WaaS: Work-as-a-Service

Work-as-a-Service (WaaS) goes beyond the automation of tasks to the automation of entire workflows, operational areas, or even business units. It is the perfect evolution for businesses in the era of AI-driven task delegation, where sophisticated systems take over not just manual tasks but decision-making and strategy execution.

WaaS is particularly suited for businesses that aim to scale their operational models through AI systems. This approach involves moving human resources toward higher-level strategic work and leaving the execution of repetitive, operational tasks to AI.

1. Task-Oriented Flexibility: WaaS enables businesses to outsource strategic decision-making and task execution to AI-based agents. It allows CxOs to focus on high-level objectives while the "workforce" of intelligent systems handles the execution. Pricing is based on output—how many workflows the AI system completes or the financial results it generates.
2. Plug-and-Play Operations: Companies can integrate WaaS platforms to run their business models. For instance, an AI-driven supply chain system could automate procurement, vendor selection, and shipping logistics without human oversight. Businesses essentially "subscribe" to having certain operations managed autonomously.
3. Scalability of Work: As businesses grow, traditional models require human resource scaling, which comes with costs and complexity. In contrast, WaaS enables enterprises to scale their operations infinitely, as autonomous systems complete the tasks without needing additional headcount.

The Role of Agentic Systems in VaaS/WaaS

The evolution from SaaS to VaaS and WaaS is tightly linked to the emergence of agentic systems—AI that processes data and takes action based on the insights it generates. These intelligent agents can execute decisions at speed and scale that are impossible for human-driven operations.

• Autonomous Operations: In a VaaS or WaaS model, agentic systems can autonomously manage entire functions—financial planning, marketing, customer service, or logistics.
• Value Delivery at Scale: With AI-driven agentic systems, businesses can measure and deliver value more predictably, as these systems can adjust in real-time to new data and circumstances. This makes outcome-based pricing models feasible, as the vendor and customer can rely on continuous optimization.

Steps for Transitioning from SaaS to VaaS/WaaS

1. Define Measurable Outcomes: The first step for SaaS companies moving to a VaaS/WaaS model is understanding the direct business value they create. Defining the outcome, whether cost savings, revenue growth, or increased operational efficiency, is crucial.
2. Integrate AI Systems: VaaS and WaaS models heavily rely on AI to automate and optimize operations. This requires integrating AI solutions into your software architecture, enabling them to deliver real-time business outcomes.
3. Rethink Pricing Models: Move away from usage-based pricing to models that reflect value creation. This could include performance-based contracts, where customers pay based on realized savings or increased profits.
4. Adopt a Service-Centric Mindset: SaaS providers must shift from selling software to delivering solutions that work autonomously in the background. This could mean bundling software with ongoing consulting, strategic guidance, or even offering fully managed AI-driven services.

Final Thoughts

The transition from SaaS to VaaS/WaaS isn't just a response to market pressures; it's an opportunity for companies to redefine customer relationships. As software becomes commoditized, businesses must find new ways to offer irreplaceable value, and leveraging AI for intelligent, outcome-driven services is the next logical step.

CxOs looking to stay ahead of the curve must embrace these emerging models. By delivering clear, measurable business outcomes, companies can ensure their survival and success in a world where software alone is no longer enough. The future belongs to those who can seamlessly integrate AI, automation, and value creation—ushering in a new era of business transformation.