Volume 74 | October 14, 2024
Welcome to Brief 74!
Recent introductions by StratorSoft (Reks.ai) and Cohesion (Savvy) and the broader adoption of AI Agents in enterprise software signal significant changes to come in our industry, by my account. The recent news from Salesforce that I have discussed below may also signal things to come. If you've seen my "Inevitable Trends" presentation, you know I consider Salesforce to be one of the top four influences that have shaped our industry. I look forward to hearing your thoughts on this Brief.
Before diving into it, I wanted to share a couple of updates:
I recently attended Securing New Ground in NY, which I updated in Slack and posted on LinkedIn. I also recorded a 3-part webinar series at Envoy, focusing on trends and the future of physical security and workplace safety. Having Jason Herrington of Rinkor Security join me for episode 2 was a pleasure. Envoy will release these webinars over the next three months, and I'll keep you informed.
Next week, I'm heading to the United Kingdom to keynote AMAG's SES24 conference. With a waiting list of over 70 and a sold-out event, I'm excited to present on global trends impacting our industry and gain insights into the changes at AMAG. I'll share my observations upon return.
Lastly, thank you to those who responded about Access Night at The Security Event. To RSVP, please get in touch with Hilary@leeodess.com. Please contact Hilary or me if you want to partner with us for the event.
Plus, for the remainder of 2024:
-
Brivo's Cloud Security Summit in Austin, Texas (coverage)
-
Executive Meeting at DMP in Missouri with an industry dinner in Kansas City (coverage)
-
Stop in Chicago to meet with Liftmaster/Chamberlain (coverage)
-
Back to NY for ISC East, where we're activating the Critical Infrastructure Pavilion in partnership with the show. Helping host a VIP breakfast with CoreWillSoft and an industry night with ZKTECO USA (activation and coverage)
-
Another trip to New York for the Security Investor Conference by Imperial Capital (speaking and coverage)
-
Then to Groenlo, NL (outside Amsterdam) to meet with the leadership team at NEDAP (coverage)
Also, keep an eye out for the following:
-
Intersec Dubai and the Thought Leadership Pavilion
-
ISC West in Las Vegas with the AI Zone and much more
-
The Security Event in Birmingham, UK, with the XForum and the Night of Access industry night happy hour (RSVP now as we only have 100 spots for what will be a great night of fun and networking)
We're in the process of setting up our calendar for the rest of the year. If you're hosting your annual sales kickoffs or partner events, looking to do something different in a trade show booth, or would like me to visit your headquarters for a write-up and strategy session, please reach out.
As always, your feedback is invaluable to us. Please let me know if there's any area where we can better meet your expectations.
Now, let's get into the main topic of this Brief...
Thank you!
PS: I am sure some of you may forward this, but please do so sparingly and encourage others to sign up here. Thank you!
The Shift from SaaS to AaaS: A New Era in Software Pricing
This change marks the beginning of a new era in how companies pay for software, moving away from the traditional per-seat SaaS (Software-as-a-Service) model to consumption-based pricing for AI agents. This transition signals a significant shift in the software industry (I know it's been used by others, but knowing Salesforce's history, this move can shift many others), potentially marking the evolution from SaaS to AaaS (Agent-as-a-Service).
The End of Per-Seat Pricing
In a world where AI agents will perform the functions of entire departments, the concept of per-seat pricing will become obsolete. Instead, we're moving towards a model where companies pay for outcomes - the actual value delivered by the software. You can see how this may be relevant to our industry. This shift is not just a minor adjustment in pricing strategy; it represents a fundamental change in how we perceive and value software.
Fundamental Changes in the New Model
Here is my summary of what's changing with this new model:
-
From access to outcomes: Companies will pay for what the AI accomplishes rather than just having access to the technology.
-
From subscriptions to value: Pricing will adjust based on usage and results, providing a more flexible and fair system.
-
From Software-as-a-Service to Agent-as-a-Service: Technology will act more as a collaborative partner, working alongside humans to achieve desired outcomes.
Implications for Businesses and Us?
You can imagine a shift towards outcome-based pricing having significant implications for businesses, such as:
-
Budgeting evolving: Costs will align directly with the value received, making it easier for businesses to justify their technology investments. Hard to argue.
-
ROI becomes more apparent: Measuring the direct impact of technology investments will be easier, helping companies make more informed decisions. We have been a TCO industry and recently have been telling ROI stories. Is this another?
-
Greater flexibility: Companies can scale their usage up or down based on needs without worrying about seat counts, providing more agility in resource allocation.
Challenges and Considerations
While this new model offers interesting possibilities (and I'm sure newer companies will take a hard look at this as soon as possible), it also presents challenges. Not every SaaS company may be ready to embrace a model where companies pay directly for the value they receive. There's also a distinction between paying for usage (consumption) and paying for actual results (outcomes). While Salesforce is moving towards consumption-based pricing, it remains to be seen whether this translates to outcome-driven pricing.
The Future of Software Interfaces
As we move into this new era, we can expect to see SaaS interfaces evolve to focus more on controlling AI agents to perform tasks on behalf of users. See my note above about StratorSoft and Cohesion. These tasks will generate measurable value and, of course, accrue cost. The exact pricing mechanisms and value measurements are still unfolding. Still, we're entering a new phase in the software industry right now, when our industry is just starting to get comfortable with per-seat.
In Conclusion
The shift from SaaS to AaaS can represent a significant pivot in how software value will be measured and priced. While consumption-based models aren't entirely new, applying them to AI agents that can perform end-to-end tasks is very new. As we move forward, the key differentiator for businesses could be how effectively they can control AI agents and make critical decisions based on industry-specific nuances like access control. This new paradigm has the potential to democratize skills in the same way the Internet democratized access to knowledge, ushering in a new era of value-driven software utilization.
Will it impact our industry? In my opinion, with out a doubt.
What a wild time to be in the access control industry. It's another example of how the next 30 years will be different from the past 30.
