Services-as-Software: Blurring the Lines Q3 2026
- Gaurav Bhasin
- Jul 22
- 2 min read
Enterprises are increasingly not buying software for the software in the traditional sense. They are buying it to get work done, and agentic AI is slowly but surely enabling the vision possible to sell that work directly.
Allied Advisers' latest report, Services-as-Software: Blurring the Lines, explores how AI agents are moving from workflow assistance to outcome delivery. For years, copilots have helped people work faster on routine and simple tasks. That is starting to change as AI agents begin to take on and complete the work itself rather than just assisting. The opportunity is significant; for every $1 enterprises spend on software, they spend about $6 on services and labor to get the work done, per a report by Sequoia Capital. As one Y-Combinator partner put it: "Providers can use the software themselves and sell the finished product at 100x the price."
The Services-as-Software (SaS) market is already taking shape:
US SaS market: $3.9B (2025) → $26.7B by 2034
Global opportunity: $1.5T by 2035
Adoption: 16% of firms already replacing human-led services with AI; 59% plan to by 2029
But capturing this opportunity requires more than advanced models. It requires embedding AI into enterprise workflows. This is where Forward Deployed Engineers (FDEs) come in to act as the last-mile bridge between AI capability and enterprise adoption. Leading software/AI companies are investing billions in embedded teams to help move customers' AI initiatives from pilots to production – OpenAI's $4B Deployment Company, Anthropic's $1.5B+ Ode venture, and AWS's $1B FDE buildout among them.
The report also examines what this shift means for operators, investors and M&A participants. It covers AI-native pure-play positioning, incumbent strategy shifts, and recent acquisitions of FDE talent such as OpenAI’s acquisition of Northslope and Tomoro, Accenture’s acquisition of Faculty and IBM’s acquisition of Hakkoda. Allied Advisers is actively partnering with founders and investors to capitalize on this SAS shift in a potentially trillion-dollar market.
