Artificial intelligence as a service (AIaaS) is a cloud-based solution for enterprises to invest in advanced technology. Here, we’ll discuss AIaaS, its role in today’s market, and how businesses achieve their goals by partnering with AI service providers.
The adoption rate of artificial intelligence has increased multifold over the years. Many businesses, be they startups or established enterprises, are investing in AI in varied ways to gain a competitive edge and survive volatile market conditions. According to Grandview Research, the AI market is likely to experience an annual growth rate of 37.7% between 2023 and 2030. A report by Markets & Markets shows that the global AI market is predicted to reach $1.3 trillion by 2030.
Fortunately for businesses, nonprofits, and government agencies, any organization can adopt AI technology on any scale. It can be a tiny part of your business process or be 100% integrated into all processes across the departments and verticals. Moreover, artificial intelligence services are diverse and customizable. Naturally, this led to a relatively new cloud-based AI offering called AI as a service (AIaaS). This is more convenient, budget-friendly, and effective compared to large-scale AI adoption and implementation.
But what exactly is AIaaS? What does an AI services company do to offer artificial intelligence as a cloud service? Will it be a worthy choice for businesses in 2025?
Let’s find out!
AI as a service (AIaaS) is a new business model where service providers offer artificial intelligence-based solutions through a cloud platform. Instead of setting up the AI tools/ apps on-premises, the software is hosted on a remote cloud server and accessed by users whenever necessary.
All technologies and tools under the umbrella term AI are available on the cloud. Be it machine learning algorithms, natural language processing (NLP) models, large language models (LLMs), generative AI apps, computer vision, advanced analytical tools, etc., can be accessed remotely to get near real-time and real-time results. In the AI as a service business model, you subscribe to use the required tools and software provided by the vendors. You pay only for what to use and not for all the other services offered.
Additionally, the pay-as-you-go model allows startups and emerging businesses to save money on unwanted expenses. You can upgrade or downgrade the subscription plan as necessary. Furthermore, there’s no need to invest heavily in building the IT infrastructure in the office. Employees can use their personal devices and work from any location as long as they have been authorized to access the tools.
As per Global Market Insights, the AI as a service market size is expected to grow at a CAGR (compound annual growth rate) of 28% between 2023 and 2032 and reach $75 billion by 2032. This growth rate can be attributed to the ease of using artificial intelligence as a cloud service.
The main purpose of AIaaS is to eliminate the need for unwanted hardware and bring greater flexibility to the business’s IT infrastructure. AI as a service is diverse and can be classified into the following types.
Whether you want to implement only one of the above or a combination (and all of them), the AI product development company will create a price plan accordingly and determine the subscription charges. That way, you pay for what you use while ensuring quality, scalability, agility, and personalization are not compromised. Of course, there can be a few concerns like data security, lock-in agreements, and transparency about the core AI systems used.
However, these issues are a problem only if you choose a service provider at random. Many reliable companies that offer AI as a service address these concerns proactively. For example, DataToBiz is an ISO-certified AIaaS company that complies with global data regulations and has a transparent pricing model. The developers use existing cloud technologies or build new models based on clients’ requirements. With the right partner, you can vastly benefit from switching to the AIaaS business model.
What makes AI as a service a better alternative to implementing artificial intelligence in your business? Check out below.
With AIaaS, an organization can quickly build, develop, and release products into the market. The production cycle can be shortened without affecting quality and performance. AI product development in today’s world results in low-code or no-code applications that can be built and customized in a fraction of the time usually required to develop a model from scratch. The drag-and-drop interfaces accelerate time to market and allow you to quickly launch new products before competitors.
AI as a service is a long-term solution or an agreement with the service provider. As long as you pay for the subscription, you will get continuous improvements and upgrades offered by the company. In most enterprise price plans, you don’t have to pay extra for troubleshooting, upgrading, or maintenance services. The service provider offers these as a part of the package. Over the years, you gain more from the service and see positive growth in ROI.
Advanced technology is not cheap, and not every business has the capacity to buy new tools and software as soon as they are released. What will you do with the existing apps? How many can you buy only to use for a limited period? However, with AI as a service, there’s no need to make huge purchases. You can use the latest tools without buying them outright. That makes it feasible for startups and small businesses to use technology just like large enterprises do. The stakes are lower as you can switch from one service provider to another or use a different platform if the current one doesn’t meet your expectations.
As mentioned earlier, AI as a service offers more flexibility in choosing what features, tools, frameworks, and solutions to implement in a business. There’s no need to complicate the systems by trying to use every available option for its own sake. Similarly, growing businesses have fluctuating demands and variable budgets. The seamless scalability of AIaaS model lets organizations adjust their usage as per the requirements. Since scaling doesn’t require replacing existing models or rebuilding everything from the foundation, it saves a lot of time and resources for the enterprise.
The COVID pandemic has brought a definite shift in work patterns. Though employees are back to working at offices, remote teams and offshore collaborations are a thing. In fact, we can now see many startups and SMBs being run 100% remotely. AI as a service supports this work style with ease. Employees from different locations can access the same platforms and applications in real-time to complete their tasks. This eliminates the need to build heavy infrastructure in the office and further helps to save money.
AI as a service is said to democratize artificial intelligence by making advanced technology accessible to SMBs. The needs of a large enterprise are different from what a startup looks for from AI solutions. Similarly, a business from the telecom industry has a different set of metrics than a healthcare provider even when they use the same AI tools. AIaaS allows for customization on multiple levels without compromising performance. In fact, it delivers better results when you personalize a tool/ app for your requirements.
Running large ML and LLMs is not easy. They require high computing power and robust hardware. Generative AI services are in high demand through AIaaS because the business model provides access to unlimited computing power for a relatively lower price. Hosting an app like ChatGPT by downloading it on your computer can drain your resources. However, running it in the vendor’s cloud is cheaper and gives faster results. With a reliable and high-speed internet connection, you can get the results in real time.
With AI as a service offering many real-life use cases, like predictive analytics, personalized marketing, accurate translations, and in-depth business intelligence, there’s no denying that it is a worthy model for businesses to take the plunge and integrate artificial intelligence into their systems. AIaaS could very well be the differentiating factor and give a definite edge over competitors in 2025.
Here are a few aspects to expect from AI as a service in the near future.
AI as a service depends much on the partner you choose to support your business organization. A reliable and certified provider will know how to overcome the roadblocks and build a high-performing cloud-based AI system that aligns with your vision and objectives.
Talk to an AI consulting services provider about your requirements and look at their portfolios before making a decision. Get end-to-end and tailored AIaaS solutions to achieve your goals and become an industry leader.
The AI as a service (AIaaS) business model is turning out to be a critical growth strategy for many organizations. Rather than spending millions on implementing AI in-house, it takes fewer resources and less time to use cloud solutions and integrate them with the existing systems. The flexibility of AIaaS makes it a great choice for any enterprise from any industry.
Read on to learn how AI as a service can transform your business for the better.
The four types of artificial intelligence are as follows:
Microsoft Azure, Amazon Web Services (AWS), and Google Cloud can be described as some examples of AI as a service. While these are cloud platforms, they offer SaaS, PaaS, IaaS, and AIaaS solutions for small, medium, and large organizations from around the globe.
Yes! ChatGPT is a great example of AIaaS. Here, OpenAI offers AI as a service by hosting the generative AI app on its cloud server and allowing users to access it at any time and from any location. With a paid subscription, you can scale your usage and access more features.
The responsibility of building AIaaS lies on the AI services company. The experts will understand your current position and challenges to create a robust strategy for building, deploying, and integrating cloud-based AI tools. The process varies based on your requirements, timeline, industry standards, and other factors.
There is no definite answer to this question. The best AI tool changes from one person to another and one organization to another. For example, ChatGPT may be the best tool for some users while others may prefer Copilot, etc.
AI is used in services in many ways, like automating workflows, building virtual chatbots, translating content to and from multiple languages, analyzing customer data, creating customer loyalty programs, supporting helpdesk, etc. It enables businesses to reduce costs while increasing quality of service to ensure customer satisfaction.
Fact checked by –
Akansha Rani ~ Content Creator & Copy Writer
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