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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

#161

Post by re-thc »

InvertedRhodium wrote: post #147
rhubarbtree wrote: post #130

Earlier quoted context omitted.

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.

> 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

Do you pay for OpenTelemetry? How is this related?

Re: AI agents are starting to eat SaaS

#162

Post by a2code »

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…

I have two tech q about partsbox. Why Clojure? Why not CL (lack of saas related-features)?

Re: AI agents are starting to eat SaaS

#163

Post by TeMPOraL »

jeswin wrote: post #148
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 hap…

Yes. This is also why trying to add an AI agent chat into one's product is a fool's errand - the whole point of having general-purpose conversational AI is to turn the product into just another feature.

It's an ugly truth product owners never wanted to hear, and are now being forced to: nobody wants software products or services. No one really wants another Widgetify of DoodlyD.oo.io or another basic software tool packaged into bespoke UI and trying to make itself a command center of work in their entire domain. All those products and services are just standing between the user and the thing the user actually wants. The promise of AI agents for end-users is that of having a personal secretary, that deals with all the product UI/UX bullshit so the user doesn't have to, ultimately turning these products into tool calls.

Re: AI agents are starting to eat SaaS

#164

Post by risyachka »

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…

>> I’m currently working on an in house ERP and inventory system for a specific kind of business

this means if I sell it to your business for the price of Why? because my will always be better as 10 people work on it vs you alone.

Internal versions will never be better or cheaper than saas (unless you are doing some tiny and very specific automation).

They can be better than current solution - but only a matter of time when someone makes a saas equal and better to what you do internally.

Sure almost anything will be better and cheaper that hubspot.

But with AI smaller CRMs that are hyper focused on businesses like yours will start popping up and eating its market.

Anything bigger than a toy project will always be cheaper/better to buy.

Re: AI agents are starting to eat SaaS

#165

Post by skywhopper »

TeMPOraL wrote: post #163
jeswin wrote: post #148

Earlier quoted context omitted.

> 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 hap…

Yes. This is also why trying to add an AI agent chat into one's product is a fool's errand - the whole point of having general-purpose conversational AI is to turn the product into just another feature . It's an ugly truth product owners never wanted to hear, and are now being forced to: nobody wants software products or services . No one really wants another Widgetify of DoodlyD.oo.io or another basic software tool…

Assuming this ever works, this is no threat to the SaaS industry. If anything it increases its importance.

Re: AI agents are starting to eat SaaS

#166

Post by jwr »

a2code wrote: post #162
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…

I have two tech q about partsbox. Why Clojure? Why not CL (lack of saas related-features)?

Clojure is just better than CL in pretty much every respect. Excellent and well designed standard library, great concurrency primitives, core.async, built-in transducers (CL has SERIES which does a kind-of similar thing, but isn't as well designed and integrated) and the dominant immutability all let me write more maintainable code. Also, I can re-use model code on the client side (ClojureScript), so there is lots of code sharing, and I don't have to serialize to a crippled format (JSON), my data can pass from server to client and back intact (with sets, keywords, and other rich data types).

I used to love CL and wrote quite a bit of code in it, but since Clojure came along I can't really see any reason to go back.

Re: AI agents are starting to eat SaaS

#167

Post by TeMPOraL »

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 problem IMO is simpler.

You have a product, which sits between your users and what your users want. That product has an UI for users to operate. Many (most, I imagine) users would prefer to hire an assistant to operate that UI for them, since UI is not the actual value your service provides. Now, s/assistant/AI agent/ and you can see that your product turns into a tool call.

So the simpler problem is that your product now becomes merely a tool call for AI agents. That's what users want. Many SaaS companies won't like that, because it removes their advertising channel and commoditizes their product.

It's the same reason why API access to SaaS is usually restricted or not available for the users except biggest customers. LLMs defeat that by turning the entire human experience into an API, without explicit coding.

Re: AI agents are starting to eat SaaS

#168

Post by TeMPOraL »

skywhopper wrote: post #165
TeMPOraL wrote: post #163

Earlier quoted context omitted.

Yes. This is also why trying to add an AI agent chat into one's product is a fool's errand - the whole point of having general-purpose conversational AI is to turn the product into just another feature . It's an ugly truth product owners never wanted to hear, and are now being forced to: nobody wants software products or services . No one really wants another Widgetify of DoodlyD.oo.io or another basic software tool…

Assuming this ever works, this is no threat to the SaaS industry. If anything it increases its importance.

SaaS products rely on resisting commoditization. AI agents defeat that.

Re: AI agents are starting to eat SaaS

#169

Post by mattmanser »

torginus wrote: post #149
Aurornis wrote: post #70

Earlier quoted context omitted.

> 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 solu…

SaaS software, by it's very nature, tends to gets tested tons more than your inhouse software. It also has more devs working on the software. It is almost certainly more stable and can handle more edge cases than anything developed inhouse. It's always a question of scale.

But what you're describing is the narrow but deep vs wide but shallow problem. Most SaaS software is narrow but deep. Their solution is always going to be better than yours. But some SaaS software is wide but shallow, it's meant to fit a wide range of business processes. Its USP is that it does 95% of what you want.

It sounds like you were using a "wide-shallow" SaaS in a "narrow-deep" way, only using a specific part of the functionality. And that's where you hit the problems you saw.

Re: AI agents are starting to eat SaaS

#170

Post by lwhi »

Aurornis wrote: post #78
lwhi wrote: post #42

Earlier quoted context omitted.

Information about the way we interact with the data (RLHF) can be used to refine agent behaviour. While this isn't used specifically for LLM training, it can involve aggregating insights from customer behaviour.

That’s a training step. It requires explicitly collecting the data and using it in the training process. Merely using an LLM for inference does not train it on the prompts and data, as many incorrectly assume. There is a surprising lack of understanding of this separation even on technical forums like HN.

That's definitely a fair point.

However, let's say I record human interactions with my app; for example when a user accepts or rejects an AI sythesised answer.

This data can be used by me, to influence the behaviour of an LLM via RAG or by altering application behaviour.

It's not going to change the weighting of the model, but it would influence its behaviour.

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