1、September 2025Technology,Media&Telecommunications PracticeUpgrading software business models to thrive in the AI eraAI is transforming software from a tool that enables work into a platform that actively performs and orchestrates work.How should industry players evolve their business models to lead

2、in this new era?by Mohit Khanna and Nimish Mittalwith Ashley Wu and Marc CastilloRoughly three years since gen AI emerged as the most disruptive force in enterprise software since the dawn of software-as-a-service(SaaS),companies are racing to launch agentic use cases and embed AI in every workflow.

3、Whereas previous shifts in the industry have involved clear technological transformations,this burgeoning era is more combinatorial;AI+SaaS adds the intelligence and automation potential of AI with the scalability and accessibility of cloud-based software.But while many software players are bringing

4、 AI capabilities to existing products and rapidly devising new ones,the most suitable business model is still in question.There is little doubt that the potential opportunity is massive:Previous McKinsey research indicates that as much as$4.4 trillion of incremental economic potential could be gener

5、ated from AI-driven increased productivity.1 The total addressable market for AI+SaaS has expanded beyond IT budgets to include laborand momentum appears to be building.One year ago,33percent of companies surveyed saw productivity impact at scale or were already capturing financial impact from AI.In

6、 2025,46 percent of companies are(Exhibit 1).Even as customer traction accelerates,a critical question remains:How will leaders evolve their business and go-to-market(GTM)models to thrive in this new AI+SaaS era,as they have needed to in previous shifts?1 “The economic potential of generative AI:The