This boom has naturally caught the attention of venture capitalists. Funding for software companies hit $80 billion in Q1 2025, with investors eager to back niche SaaS solutions that follow the familiar playbook: identify a pain point, build a narrow tool, and scale aggressively. Y Combinator’s recent cohort was full of “Cursor for X” startups, reflecting the prevailing appetite for micro-products.
But beneath this surge of point solutions lies a deeper transformation: the shift from product-led growth to outcome-driven service delivery. This evolution isn’t just about branding—it’s a structural redefinition of how software creates and delivers value.
Historically, the SaaS revolution gave rise to subscription-based models, but the tools themselves remained hands-on. For example, when Adobe moved Creative Suite to the cloud, the billing changed—not the user experience. Users still needed to operate the software. SaaS, in that sense, was product-heavy and service-light.
Now, AI is dissolving the product layer itself. The software is still there, but it’s receding into the background. The real value lies in what it does, not how it’s used. Glide co-founder Gautam Ajjarapu captures this perfectly: “The product gets us in the door, but what keeps us there is delivering results.”
Take Glide’s AI for banks. It began as a tool to streamline onboarding but quickly evolved into something more transformative. Banks now rely on Glide to improve retention, automate workflows, and enhance customer outcomes.
The interface is still a product, but the substance is service.
The same trend is visible across leading AI startups. Zendesk markets “automated customer service,” where AI handles tickets end-to-end. Amplitude’s AI agents now generate product insights and implement changes. These offerings blur the line between tool and outcome—more service than software.
This shift is grounded in economic logic. Services account for over 70% of U.S. GDP, and Nobel laureate Bengt Holmström’s contract theory helps explain why: businesses ultimately want results, not just tools.
They don’t want a CRM—they want more sales. They don’t want analytics—they want better decisions.
With agentic AI, it’s now possible to deliver on that promise. Instead of selling a dashboard, companies can sell growth. Instead of building an LMS, they offer complete onboarding services powered by AI agents.
This evolution is especially relevant in sectors like healthcare. Corti’s CEO Andreas Cleve emphasizes that doctors don’t want more interfaces—they want more time. AI that saves time becomes invisible, and its value lies in what it enables, not how it looks.
The implication is clear: software is becoming outcome-first. Users care less about tools and more about what those tools accomplish. Many companies—Glean, ElevenLabs, Corpora—are already moving toward this model, delivering answers, brand voices, or research synthesis rather than just access.
This isn’t the death of the product—it’s its natural evolution. The best AI companies are becoming “services in a product wrapper,” where software is the delivery mechanism, but the value lies in what gets done.
For builders, the question is no longer how to scale a product. It’s how to scale outcomes. The companies that succeed in this new era will be those that understand: users don’t want features—they want results.
Call it what you want—AI-as-a-service, agentic delivery, or outcome-led software. But the trend is unmistakable. Service-as-a-Service isn’t just the next step for SaaS. It may be the future of software itself.
