Really interesting read, thank you!
I'm currently working for a very traditional SaaS company (let's call us FooBar for the discussion), and I can say that this fear is very real. We talk a lot about the "FooBar killer" which is a theoretical startup company working right now on a better solution than ours. We know that there are a few of those and we even started working on one of our own exactly because of that. If you can't beat the "engineers with a spare Friday afternoon" you might as well join the attempt to replace you.
AI agents are starting to eat SaaS
121–130 of 398 posts
Re: AI agents are starting to eat SaaS
#122Note that the author does not mention a single specific SaaS subscription he’s cancelled or seen a team cancel. The only named product was Retool.
Good point! For me the only change that happened so far (because the agentic product was better) was switching from JetBrains to Cursor. I'm sure this will happen with more products I use in the future
Re: AI agents are starting to eat SaaS
#123Note that the author does not mention a single specific SaaS subscription he’s cancelled or seen a team cancel. The only named product was Retool.
We just had a $240/year renewal for teamretro.com come due, and while TeamRetro has a lot of components, we are only using the retro and ice breaker components. So I gave Claude Code a couple of prompts and I now have a couple static HTML pages that do the ice breaker (using local storage) and the retro (using a Google sheet as the storage backend, largely because it mimics our pre-teamretro process). It took me no m…
How is teamretro a product to begin with? I feel like these SaaS’s exploded like js libraries.
Re: AI agents are starting to eat SaaS
#124I'm CTO at a vertical SaaS company, paired with a product-focused CEO with deep domain expertise. The thesis doesn't match my experience.
For one thing, the threat model assumes customers can build their own tools. Our end users can't. Their current "system" is Excel. The big enterprises that employ them have thousands of devs, but two of them explicitly cloned our product and tried to poach their own users onto it. One gave up. The other's users tell us it's crap. We've lost zero paying subscribers to free internal alternatives.
I believe that agents are a multiplier on existing velocity, not an equalizer. We use agents heavily and ship faster than ever. We get a lot of feedback from users as to what the internal tech teams are shipping and based on this there's little evidence of any increase in velocity from them.
The bottleneck is still knowing what to build, not building. A lot of the value in our product is in decisions users don't even know we made for them. Domain expertise + tight feedback loop with users can't be replicated by an internal developer in an afternoon.
Re: AI agents are starting to eat SaaS
#125This article made no sense to me. It is talking about AI-generated code eating SaaS. That's not what is going to replace SaaS. When AI is able to do the job itself — without generating code — that's what is going to replace SaaS. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, handle incidents, and so on. That's very expensive. It is much cheaper to pay…
Perhaps OP's argument still applies to dev-oriented SaaS.
Are you as a dev still going to pay for analytics and dashboards that you could have propped up by Claude in 5 minutes instead?
Re: AI agents are starting to eat SaaS
#126I often give the follow analogy which I think is a good proxy to what is going on. Spreadsheets! They are everywhere. In fact, they are so abundant these days that that many are spawned for a quick job and immediately discarded. In fact, the cost of having these spreadsheets is practically zero so in many cases one may find themselves having hundreds if not thousands of them sitting around with no indication to ever…
I mostly agree. What it does do is raise the bar for a viable SaaS, and seeing some examples elsewhere in this thread, that’s a good thing.
I’d also add a number of the vibe tools tech adjacent people on my team have made are used and liked by the team. Even engineering likes them because it frees up their time to work on customer facing things.
Re: AI agents are starting to eat SaaS
#127This is borderline schizophrenia. Firstly, nobody replaces something that works with something that might or might not work.
Secondly, the way this person describes "agents" is not rooted in reality:
>Agents don't leave. And with a well thought through AGENTS.md file, they can explain the codebase to anyone in the future.
>What's going to be difficult to predict is how quickly agents can move up the value chain. I'm assuming that agents can't manage complex database clusters - but I'm not sure that's going to be the case for much longer.
What in the world. And of course he's selling a course. This is the same business as those people sitting in Dubai selling $6000 options trading courses to anyone who believes their bullshit. The grifter economy around AI is in full swing like it was around blockchain/crypto in 2017-2020.
Re: AI agents are starting to eat SaaS
#128I’m currently working on an in house ERP and inventory system for a specific kind of business. With very few people you can now instead of paying loads of money for some off the shelf solution to your software needs get something completely bespoke to your business. I think AI enables the age of boutique software that works fantastically for businesses, agencies will need to dramatically reduce their price to compete…
This is only true if you assume that you are producing the same amount of code as today. Though, AI ultimately will produce more code which will require higher maintenance. Your internal team will need to scale up due to the the amount of code they need to maintain. Your security team will have more work to do as well because they will need to review more code which will require scaling that team as well. Your infras…
> The reality is that software license costs is a tiny fraction of total business costs
Yes and no. If someone is controlling the SaaS selection, then this is true.
But I've seen startup phase companies with multiple slightly overlapping SaaS subscriptions (Linear + Trello + Asana for example), just because one PM prefers one over the other.
Then people have bought full-ass SaaS costing 50-100€/month for a single task it does.
I'd describe the "Use AI to make bespoke software" as the solution you use to round out the sharp edges in software (and licensing).
The survey SaaS wants extra money to connect to service Y, but their API is free? Fire up Claude and write the connector ourselves. We don't want to build and support a full survey tool, but API glue is fine.
Or someone is doing manual work because vendor A wants their data in format X and vendor B only accepts format Y. Out comes Claude and we create a tool that provides both outputs at the same time. (This was actually written by a copywriter on their spare time, just because they got annoyed with extra busywork. Now it's used by a half-dozen people)
Re: AI agents are starting to eat SaaS
#129I’m currently working on an in house ERP and inventory system for a specific kind of business. With very few people you can now instead of paying loads of money for some off the shelf solution to your software needs get something completely bespoke to your business. I think AI enables the age of boutique software that works fantastically for businesses, agencies will need to dramatically reduce their price to compete…
To me AI might have tilted the economic on doing in house a bit but it has been at least a decade or more that I find most enterprise SaaS, in the way they are used 80% of the time, could be recreated with a few developers in house. Instead of 10-20 developers maybe you only need 2-5 with AI, so for most big companies that doesn’t change much. A company that wants to build in house still has to hire a team. And in most non tech industries even if more expensive usually a service is preferred. SaaS was never (only) about costs, developers were already wondering why people would pay for an expensive CRM 10 years ago when it was only basic CRUD.
Re: AI agents are starting to eat SaaS
#130This article made no sense to me. It is talking about AI-generated code eating SaaS. That's not what is going to replace SaaS. When AI is able to do the job itself — without generating code — that's what is going to replace SaaS. AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, handle incidents, and so on. That's very expensive. It is much cheaper to pay…
Perhaps OP's argument still applies to dev-oriented SaaS. Are you as a dev still going to pay for analytics and dashboards that you could have propped up by Claude in 5 minutes instead?
Yes, because then I know the code is properly engineering, tested, maintained and supported.
Generating code is one part of software engineering is a small part of SaaS.