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AI agents are starting to eat SaaS

martinalderson.com

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Re: AI agents are starting to eat SaaS

#141

Post by physicsguy »

_pdp_ wrote: post #58
andy_ppp wrote: post #41

I’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…

> Soon or later the CTO will be dictating which projects can be vibe coded which ones make sense to buy.

A lot of the SaaS target companies won't even have a CTO

Re: AI agents are starting to eat SaaS

#142

Post by physicsguy »

gherkinnn wrote: post #133

Many SaaS are not products, but 1-2 features. And an LLM can generate a single-purpose script to replace that one feature you're using. Opus 4.5 does that very well. As for Retool, I see the several waves of low/no-code products, the current one being LLMs, as repeated attempts to get non technical idea-guys to build their ideas. Where they all fail, and this is fundamental to the problem they're trying to solve, is…

> is that idea-guys' ideas crack when meeting reality.

This is definitely the hardest nut to crack. I worked on a product a while ago that needed to track maintenance periods on equipment quite carefully and then use that to filter data to provide insights about how it was performing. The 'user story' was light on detail. As we got into it, there were tons of questions about how to deal with source data that was often inconsistent or patchy, time zones became an issue because much of the data we received wasn't matched correctly to their local time (customers fault not ours) and our ideas guy just couldn't deal with it - "make it work" - when ultimately they were business questions that needed answering, not just pure software tasks. AI is so sycophantic it'd just go off and write something.

Re: AI agents are starting to eat SaaS

#143

Post by Bombthecat »

benzible wrote: post #124

I'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.…

Yap. AI and agents help to centralise, not decentralise

Re: AI agents are starting to eat SaaS

#144

Post by MLgulabio »

benzible wrote: post #124

I'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.…

The basic assumption is, that we already see that an LLM can do basic level of software engineering.

This wasn't even an option for a lot of people before this.

For example, even for non software engineering tasks, i'm at an advantage. "Ah you have to analyse these 50 excel files from someone else? I can write something for it"

I myself sometimes start creating a new small tool i wouldn't have tried before but now instead of using some open source project, i can vibe spec it and get something out.

The interesting thing is, that if i have the base of my specs, i might regenerate it later on again with a better code model.

And we still don't know what will happen when compute gets expanded and expanded. Next year a few more DCs will get online and this will continue for now.

Also tools like google firebase will get 1000x more useful with vibe coding. They provide basic auth and stuff like this. So you can actually focus on writing your code.

Re: AI agents are starting to eat SaaS

#145

Post by andy_ppp »

Aurornis wrote: post #70
andy_ppp wrote: post #41

I’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…

> Why pay for SaaS when you can build something “good enough” in a week or two? About a decade ago we worked with a partner company who was building their own in-house software for everything. They used it as one of their selling points and as a differentiator over competitors. They could move fast and add little features quickly. It seemed cool at first. The problems showed up later. Everything was a little bit frag…

> Everything was a little bit fragile in subtle ways.

Maybe write some tests and have great software development practices and most importantly people who care about getting the details right. Honestly there’s no reason for software to be like this is there? I don’t know how much off the shelf ERP software you have used but I wouldn’t exactly describe that as flawless and bug free either!

Re: AI agents are starting to eat SaaS

#146

Post by ehnto »

jwr wrote: post #135

I am the founder of a niche SaaS ( https://partsbox.com/ — software for managing electronic parts inventory and production). While I am somewhat worried about AI capabilities, I'm not losing too much sleep over it. The worry is that customers who do not realize the full depth of the problem will implement their own app using AI. But that happens today, too: people use spreadsheets to manage their electronic parts (pl…

> The real value is in understanding the world (the processes involved) and modeling it in a way that cuts a good compromise between ease of use and complexity.

Which I don't think can be replaced by AI in a lot of cases. I think in the software world we are used to things being shared, open and easily knowable, but a great deal of industry and enterprise domain knowledge is locked up inside in companies and will not be in the training data.

That's why it's such a big deal for an enterprise to have on prem tools, to avoid leaking industry processes and "secrets" (the secrets are boring, but still secrets).

A little career advice in there too I guess. At least for now, you're a bit more secure as a developer in industries that aren't themselves software, is my guess.

Re: AI agents are starting to eat SaaS

#147

Post by InvertedRhodium »

rhubarbtree wrote: post #130
jdthedisciple wrote: post #125

Earlier quoted context omitted.

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.

How do you/I know that? I implemented OpenTelemetry in a project of mine recently and was shocked to see the number of AI authored commits in the git repository.

Re: AI agents are starting to eat SaaS

#148

Post by jeswin »

benzible wrote: post #124

I'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.…

> For one thing, the threat model assumes customers can build their own tools.

That's not the threat model. The threat model is that they won't have to - at some point which may not be right now. End users want to get their work done, not learn UIs and new products. If they can get their analysis/reports based on excels which are already on SharePoint (or wherever), they'd want just that. You can already see this happening.

Re: AI agents are starting to eat SaaS

#149

Post by torginus »

Aurornis wrote: post #70
andy_ppp wrote: post #41

I’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…

> Why pay for SaaS when you can build something “good enough” in a week or two? About a decade ago we worked with a partner company who was building their own in-house software for everything. They used it as one of their selling points and as a differentiator over competitors. They could move fast and add little features quickly. It seemed cool at first. The problems showed up later. Everything was a little bit frag…

In my experience, SaaS is also fragile. It's real software, with real bugs. Most complex solutions offer an extensible API/scripting support with tons of switchable/pluggable modules to integrate with your company's infra. This complexity most often means that your particulary combination of features is almost wholly unique, and chances are your SaaS has much less open mindshare/open source support than any free solution.

We often ended up discarding large chunks of these poorly tested features, instead of trying to get them to work, and wrote our own. This got to a point where only the core platform was used, and replacing that seemed to be totally feasible.

SaaS often doesn't solve issues but replaces them - you substitute general engineering knowledge and open-source knowhow with proprietary one, and end up with experts in configuring commercial software - a skill that has very little value on the market where said software is not used, and chains you to a given vendor.

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