In a world racing to automate, a surprising insight is emerging: the biggest AI opportunity lies not in software, but in services.
“Those who can turn human-delivered services into software, Service-as-Software, while maintaining the human support that enables customers to undergo that transition, will build the next generation of giant companies,” writes Lotan Levkowitz, General Partner at Grove Ventures.
Forget what you thought you knew from the Software-as-a-Service (SaaS) boom. This is not SaaS 2.0, it’s a new playbook entirely.
While SaaS transformed software consumption with low-touch onboarding and self-service interfaces, it has failed to deeply penetrate industries that thrive on trust, personalization, and ongoing support.
Enter Service-as-Software. Instead of selling just a tool, Service-as-Software companies sell a complete solution, designed to replace entire business processes that are traditionally handled by humans. Think legal, healthcare, recruiting, accounting – massive industries valued in the trillions.
“Customers don’t want to read documentation or experiment with a user interface. They want someone to solve their problem. Full stop.” Lotan Levkowitz
Yet, these sectors remain largely untouched by true digital transformation, not because of lack of demand, but due to operational complexity.
Why haven’t these service-heavy industries been “SaaS-ified”?
Because they’re not DIY.
They demand:
“Startups entering these sectors with a generic off-the-shelf product often hit roadblocks: never-ending sales cycles, pilots that don’t convert, and customers that don’t close.”
Ironically, the “least digital” industries are now the richest ground for building the next wave of tech titans.
Read the full article by Lotan Levkowitz on CTech: Services are the next software: Why the AI revolution will look different than you think
