Software Shifts Focus to Labor Budgets, Unlocking 10x Larger Market for Enterprise Automation

New York, NY – Venture capitalist Richard Kerby, a General Partner at Field Ventures and Co-founder of Equal Ventures, recently highlighted a significant paradigm shift in enterprise software, emphasizing the move from targeting traditional IT budgets to the substantially larger labor budgets. In a recent tweet, Kerby stated, "> Most SaaS targets the IT budget, but that’s just a sliver of enterprise spend. The labor budget is 10x larger. 💡 Software that does the work vs. helps you do the work." This assertion underscores a growing investment thesis around "Service-as-a-Software" (SaaSS).

Kerby elaborated on this concept in a LinkedIn article titled "The Rise of Service-as-a-Software: Software That Works For You," published on July 15, 2025. He explained that traditional Software-as-a-Service (SaaS) provides tools that assist humans, whereas SaaSS delivers autonomous AI agents that perform the work itself, effectively transforming software into a "teammate" or "employee." This evolution allows businesses to achieve outcomes directly through software, rather than just using it as an aid.

The economic imperative behind this shift is profound. According to Kerby, companies selling traditional B2B software often compete for limited IT or departmental budgets. In contrast, SaaSS companies tap into labor budgets, which he identifies as "vastly larger" than pure software budgets. This allows for significantly higher contract values and greater growth potential by replacing or augmenting human labor.

This new model is particularly transformative for traditional and "antiquated" industries, such as construction, logistics, healthcare, and financial services, which typically operate with slim IT budgets but substantial labor costs. Kerby noted that these sectors are ripe for AI-driven services that can be easily integrated to perform tasks, offering a compelling return on investment by saving on headcount and operational overhead.

Field Ventures, where Kerby is a General Partner, has built its investment thesis around this fundamental belief, seeking to back companies that leverage innovative technology to modernize these overlooked industries. The firm focuses on solutions that deliver measurable outcomes and integrate deeply into specific vertical markets, creating data moats and strong competitive advantages. This strategic pivot aims to unlock massive value by addressing the largest component of enterprise spend.