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Current panic overestimates short-term AI disruption while underestimating long-term transformation of SaaS sector.
In light of rapid advancements with artificial intelligence (AI) tools, Amara’s Law, which was developed by futurist Roy Amara in the 1970’s, offers context for India’s SaaS (Software as a Service) industry and the major questions being raised about its future. Amara's Law states "We tend to overvalue how much technology is going to affect us in a short amount of time and undervalue how much technology is going to affect us in a long period of time".
Since the AI boom began, many people have begun to panic about the future and success of SaaS firms in India. Share prices of major technology companies, like TCS and Infosys, have fallen continuously for months; revenue appears mostly stagnant; companies appear to have flat-lined or decreased the number of employees hired; and technology leaders who have predicted gloom and doom are amplifying both the fear and uncertainty about the future of SaaS businesses.
According to Amara's Law, the contrary dynamic also holds. This means that there is an ongoing trend of underestimating the long-term consequences of AI development. The negative ramifications of AI will be more pronounced as technologies advance in scope and scale become mainstream across multiple sectors; both scenarios suggest that the pace of change will not be immediate; however, both will progress through a series of incremental steps.
Inevitably, the continued development of AI will create significant disruption; therefore, the Indian SaaS giants must make a decision either to reinvent themselves into entirely new organizations or to continue declining slowly. While the road ahead will likely include many painful disruptions, we see multiple threats to their current state of being, such as increasing the cost of expertise by reducing the number of workers necessary to provide knowledge and skills needed to accomplish tasks that were previously accomplished by people.
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