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Agentic AI — a type of artificial intelligence (AI) that can act independently and solve problems — is seen as a big disruptor in the software-as-a-service (SaaS) landscape. Companies look poised for a dramatic shift towards more automated, personalised, and verticalised solutions with Agentic AI, which is made up of AI agents that work together to achieve a goal.
In an exclusive interview with The Federal, Srinivasan Raghavan, the Chief Product Officer of SaaS major Freshworks, explores how AI is transforming customer and employee experiences, driving efficiency, and reshaping the industry’s future.
Edited excerpts:
We’re constantly hearing from business leaders closely working in the AI space that Agentic AI could disrupt SaaS with a lot of back-end business logics being automated. Are you concerned?
I think, rightfully so, people are somewhat concerned about the unknown impact of Agentic AI on the SaaS industry. Having gone through multiple transitions over the last 20 years, this is likely one of the biggest changes the industry will experience.
Particularly, what’s been happening in the SaaS industry over the last 5 to 10 years is the prevalence of what I call “shelfware” — software that’s purchased but hardly used. Around 20 to 30 per cent of licences often go unused in the industry.
What agentic AI will do is, in some cases, augment the efforts of humans performing tasks, particularly in horizontal software like CRM (customer relationship management) or ITSM (IT service management software). It will also make software much more verticalised. Right now, most people buy generic software, integrate it, and use it according to their specific industry needs — think life sciences, where you’d have to integrate with Epic Systems, or financial services, where you might integrate with Bloomberg.
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Agentic AI is going to help automate those integrations, leading to much more verticalised SaaS software. It will cater to specific industries and personalise the experience for every user. Right now, tools like Microsoft Outlook or Word are the same for everyone, but we all use them in very different ways. Agentic AI will not only automate processes but also personalise and verticalise software, providing more value to the end user.
There are two key shifts here: first, less human intervention and more automation; second, and more importantly, a transition in the monetisation model. SaaS vendors will move from a seat-based licensing model to a usage-based one. Some industries have already made this shift — for example, Twilio and Snowflake, both of which sell based on usage.
My sense is that the SaaS industry will undergo a transformation, offering much more personalised and verticalised software. This will create value for end users, and SaaS vendors will capture some of that value. Ultimately, customers will see increased costs, but they’ll be spending less on labour and more on software. Productivity will increase.
As long as SaaS vendors can prove the value of their products, they will evolve into SaaS-infused, agentic AI-powered companies in the not-so-distant future. This presents a huge economic opportunity for SaaS vendors.
What role is Freshworks playing in this Agentic AI space, and how do you see it shaping the future of AI-powered customer interactions?
We focus on two main product areas to help our end customers. One is employee experience, which includes ITSM, ITOM (IT operations management), and ITAM (IT asset management), among other things —essentially helping employees with their IT needs. The other part of our business is CX (customer experience), which is about helping customers deliver customer support and improve their overall customer experience. These are the two main business lines we have, and in both cases, we aim to help our customers achieve specific outcomes.
There are three main outcomes we focus on. First, before human interaction, we use AI agents to provide faster service to end users. These were previously called virtual agents but are now referred to as AI agents. For example, on the employee experience side, instead of contacting a human to reset a password, a user can have it automatically done by the AI agent.
On the customer experience side, customers can check order statuses or track their orders automatically using our AI agents. This helps resolve queries before a human interaction even occurs.
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Second, during human interaction, we have a product called CoPilot. CoPilot helps human agents be more productive by enabling them to answer questions more efficiently and craft responses based on historical data, such as past ticket resolutions. It helps identify patterns and provides guidance on how to resolve similar issues. This makes human agents more effective, both on the employee experience and customer experience sides.
Finally, after the interaction, we offer AI Insights, which helps organisations analyse patterns in interactions (both internally and externally). AI Insights enables companies to spot trends, such as common issues or anomalies, and identify how to resolve them. It also helps with incident resolution by uncovering the root causes of issues.
Lastly, underlying all of this, we have a platform that allows developers to build on top of it. We provide Developer CoPilot, which enables developers to create add-ons and extend the functionality of our platform.
You’ve set an ambitious target of reaching $1 billion in revenue by 2026. How does Freshworks plan to drive growth through its product portfolio?
Our guidance for 2025 is around $800 million in revenues. We’re seeing tremendous growth in our product portfolio. While we don’t disclose specific AI growth numbers, we are seeing significant expansion in the AI segment of our portfolio.
Looking ahead, from a product portfolio perspective, our focus is on helping customers deliver more agentic AI capabilities. This will enable them to automate their processes and reduce overall spending, whether on the IT side or the CX side.
By helping them save more through the cohesive use of our products, we’re enabling them to realise more value, which will ultimately help us reach our goal of $1 billion in revenue.
Are there any upcoming products in the pipeline for this calendar year?
Yes, there are a few things you’ll see. We’ll have more to share on the AI portfolio, particularly the AI agents. You’ll see more sophisticated actions being taken on the AI agent side.
On the CoPilot front, we’re working on an omni-channel CoPilot, so that will be a key development. As for bots, we’ve been doing well on the digital side so far, but we’re planning to expand into the voice side as well. This will include integrated omni-channel bots.
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These are some of the exciting areas we’re focussing on in AI. In addition, we’re expanding other parts of our portfolio. You’ll see us introduce products in ESM (employee service management), which extends our IT portfolio to a broader employee base, as well as solutions for MSPs (managed service providers).
We also acquired Device42 last year, which focusses on ITOM. We’ve already integrated it with Freshservice, and we’re in the process of moving the entire solution to the cloud. You’ll see that development come to fruition later this year.
A top SaaS firm had recently stated that there’s a hiring freeze for software engineers in 2025 due to a 30% productivity increase from AI. Do you see similar trends shaping up at Freshworks too?
Look, I’m not sure if hiring will slow down or if AI will reduce the need for more hires. What we are certainly seeing in our engineering organisation is that developers are becoming more productive.
Generally, most people work 60 to 70 hours a week, not just 40 hours. They’re putting in overtime to get things done. There’s always more work to be done than the number of people available.
AI is helping improve the efficiency and productivity of developers, which, at least in part, gives them a better work-life balance while also enabling them to be more productive. With AI co-pilots, engineers don’t have to reinvent the wheel every time they build software, and that’s one of the key benefits it’s bringing to their workflow.
As an Indian-born company now listed on NASDAQ, how do you view the Indian talent ecosystem in light of the growing adoption of AI, and what role do you see them playing moving forward?
I believe there is tremendous potential, and Freshworks is a direct result of the talent pool in India, primarily in Chennai. We have also expanded into Bengaluru and Hyderabad. I was in India in January for about three and a half weeks, visiting our offices in Chennai, Bengaluru, and Hyderabad.
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The talent we see, especially in emerging areas of technology like AI, is truly remarkable. The talent pool has certainly played a key role in helping us get to where we are, and it will continue to benefit us moving forward.
Almost our entire engineering team is based there, as well as our entire product and user experience teams. In fact, about 95 per cent of our teams are located in these three cities. I expect this to continue expanding as we grow our business.
There’s an ongoing debate in India about 70-hour or even 90-hour work weeks. What’s your take on that?
I don’t think it’s sustainable. There’s been a lot of controversy around long work weeks, and while I’m not sure who said what exactly, I don’t believe working 70 or 90 hours per week is a sustainable approach. A normal human being should get at least eight hours of sleep. Otherwise, you’re just showing up, but not really being productive for the most part.
My take is that people should maintain a good work-life balance. The time you spend at work should be spent effectively. If you’re working 40 hours a week, make those hours count. Of course, there will be instances — like product launches, major board presentations, or big client meetings — when I might work 60 or 70 hours, but that’s not every week.
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For example, I’m taking this interview at 6 am my time, which isn’t uncommon for certain deadlines. However, on the whole, it’s really hard for a human being to function beyond a certain capacity, and it’s not even healthy. You’ll eventually lose people if you push them too hard.
So, my strong belief is that people should have a work-life balance.
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