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November 2023

Hi Paul


Welcome to The Cirrostratus Group November newsletter.


This is a great case study about Eraser and how they implemented AI functionality as a sidecar product. It's also a whole new area of product functionality that AI has enabled, auto-generation of diagrams.


Great information from some new SaaS benchmarks and on the future of AI and SaaS is included in the newsletter below.


Paul Ressler

The Cirrostratus Group 

SaaS Benchmarks

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Openview Partners has just published the 2023 SaaS Benchmark Report. The whole report is worth reading and some of the takeaways include:


  • 77% of SaaS companies surveyed had either launched AI features or have AI on their product roadmap in 2023.
  • Only 15% have actually monetized AI, most SaaS companies are still in testing mode


Three factors that influence whether a company is a successful outlier include:


  • Launched and monetized AI
  • AI native application
  • Vertical SaaS application


Although growth was harder to come by in 2023 and there were positive and negative things about the market, there are still excellent opportunities for SaaS businesses that adapt.


The Future of AI and SaaS

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Bessemer Venture Partners has published their annual State of the Cloud Report. One of the main topics, along with the funding environment for the next 1-2 years, is the future impact of AI on SaaS.


Although the whole report is useful and interesting I'd suggest focusing on predications 3 & 4.

  • The majority of the value produced by AI will flow to the end users
  • The large Language Model revolution will transform the SaaS application layer


The steps to adoption for SaaS leaders section is also very worthwhile.

  • Conduct an internal audit of AI apportunities
  • Reimagine the product roadmap
  • Take action quickly


Their view is that SaaS leaders must embrace AI and that it is now tablestakes for SaaS applications.

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