AI Presents a Greater Opportunity Than SaaS, Says Girish Mathrubootham

Girish Mathrubootham, cofounder of Freshworks, stated that artificial intelligence and AI agents could represent a multi-billion dollar opportunity for India, far surpassing the potential of Software-as-a-Service. Speaking at the SaaSBoomi event in Chennai on March 25, he highlighted that the total enterprise market is valued at around $300 billion, and with the introduction of AI agents, the combined value of software and labor could create a $1 trillion opportunity. Currently, India holds a 2% share of the global SaaS market.
“Even 2% of this is a massive growth and that is the opportunity out there for whoever wants to go and get it,” he added.
“AI is exciting and scary at the same time. It is exciting because we are disrupting other industries, It is scary because we are disrupting our own industry,”  He responded to claims that SaaS is dead, agreeing that the current model of the industry is outdated and emphasizing the importance of adapting and evolving with new technologies.
Mathrubootham, who stepped down as CEO of Freshworks in May 2024, shared that as the company's executive chairman, he will focus on shaping Freshworks' AI strategy. 

Speaking to the media at the event, he addressed the growing competition from new-age players, acknowledging that while this is to be expected, established companies have the advantage of already having access to customers.“We have the data and one of the core things AI needs is the data. Now the other important thing is the GenAI technology that is available today is not available with one startup. It's available for everybody,” he said.

He stated that if incumbents can adapt and develop agent-based AI platforms, they will be able to retain customers. "This is a key component of Freshworks' AI strategy," he added. 

The company recently introduced Freddy, an AI agent designed to automate self-service for customers, as well as Freddy Co-pilot, a tool for assisting human users.

“Companies that are able to adapt will survive. Companies that are not able to adapt will be disrupted. That is the universal truth,” he added.

Companies are increasingly collaborating with startups that bring either technology or distribution capabilities to larger organizations. "This shift is inevitable, and incumbents will need to adapt accordingly," he remarked.

Additionally, the technology will drive a change in business models, transitioning from user-based pricing to consumption-based pricing. “FreshWorks has both the models for four years. The only thing is the shift is happening more on the consumption based. As automation keeps getting better, we'll get more money from automation like copilot or AI bots,” he added.