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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

#191

Post by jwr »

TeMPOraL wrote: post #167
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 pr…

Hmm. I think none of what you wrote is applicable to my specific SaaS.

Re: AI agents are starting to eat SaaS

#192

Post by torginus »

mattmanser wrote: post #169
torginus wrote: post #149

Earlier quoted context omitted.

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 goi…

I am speaking from experience. We have a SaaS tool for example to to CI/CD. It's super expensive, has a number of questionable design choices.

It's full of features, half of which either do not work, or do not work as expected, or need some arcane domain knowledge to get them working. These features provide 'user-friendly' abstractions over raw stuff, like authing with various repos, downloading and publishing packages of different formats.

Underlying these tools are probably the same shell scripts and logic that we as devs are already familiar with. So often the exercise when forced to use these things is to get the underlying code to do what we want through this opaque intermediate layer.

Some people have resorted to fragile hacks, while others completely bypassed these proprietary mechanisms, and our build scripts are 'Run build.sh', with the logic being a shell or python script, which does all the requisite stuff.

And just like I mentioned in my prev post, SaaS software in this case might get tested more in general, but due to the sheer complexity it needs to support on the client side, testing every configuration at every client is not feasible.

At least the bugs we make, we can fix.

And while I'm sure some of this narrow-deep kinds of SaaS works well (I've had the pleasure to use Datadog, Tailscale, and some big cloud provider stuff tends to be great as well), that's not all there is that's out there and doesn't cover everything we need.

Re: AI agents are starting to eat SaaS

#193

Post by adriand »

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…

The president of a company I work with is a youngish guy who has no technical skills, but is resourceful. He wanted updated analytic dashboards, but there’s no dev capacity for that right now. So he decided he was going to try his hand at building his own dashboard using Lovable, which is one of these AI app making outfits. I sent him a copy of the dev database and a few markdown files with explanations regarding certain trickier elements of the data structure and told him to give them to the AI, it will know what they mean. No updates yet, but I have every confidence he’ll figure it out.

Think about all the cycles this will save. The CEO codes his own dashboards. The OP has a point.

Re: AI agents are starting to eat SaaS

#194

Post by ben_w »

j45 wrote: post #185
ben_w wrote: post #174

Earlier quoted context omitted.

For now. I'm expecting this to be a bubble, and that bubble to burst; when it does, whatever's the top model at that point can likely still be distilled relatively cheaply like all other models have been. That, combined with my expectations that consumer RAM prices will return to their trend and decrease in price, means that if the bubble pops in the year 20XX, whatever performance was bleeding edge at the pop, runs…

The technology of LLMs is already applicable to valuable enough problems, therefore it won’t be a bubble. The world might be using a standard of AI needing to be a world beater to succeed but it’s simply not the case, AI a is software, and it can solve problems other software can’t.

> The technology of LLMs is already applicable to valuable enough problems, therefore it won’t be a bubble.

Dot-com was a bubble despite being applicable to valuable problems. So were railways when the US had a bubble on those.

Bubbles don't just mean tulips.

What we've got right now, I'm saying the money will run out and not all the current players will win any money from all their spending. It's even possible that *none* of the current players win, even when everyone uses it all the time, precisely due to the scenario you replied to:

Runs on a local device, no way to extract profit to repay the cost of training.

Re: AI agents are starting to eat SaaS

#195

Post by raw_anon_1111 »

I have been the tech lead for two companies between 2015-2020.

The first company was a low margin business that sent home health care nurses to special needs kids and reimbursements came from Medicaid.

I was hired by the new director to modernize their aging in house Electronic Medical System built on FoxPro 1999 running on SQL Server 2000 - in 2016.

They had two “developers” who had been their for 10 and 20 years respectively who only knew Sql Server and FoxPro.

They also had some other software.

After doing some assessments of the situation, my report to the director and the CTO was that this company should not try to support a software development department and hire new people. Their margins are too small to be competitive or to keep people.

I suggested we outsource everything to other consulting companies - not staff augmentation. Let the consulting company do the entire implementation based on a Statement of Work.

The two “developers” role changed to “data analyst”. Even with AI I would have said the same thing today. Not every company needs to try to do software engineering. Every company does need to understand its data. [1]

The next company was a startup. I was adamant about blocking every developer who suggested any internal tool that we could get a well known SaaS to do or where AWS had a service that wasn’t firefly related to our product. To use the cliche - anything “that didn’t make the beer taste better”. My opinion wouldn’t have changed with AI.

The last thing I want is a bunch of bespoke internal vibe coded AI Slop that we have to support that is not in service to the product when we can find a reputable third party product.

And no that doesn’t mean I am going to trust some unknown one person SaaS company.

[1] 18 months into the job, I walked into the director’s office and told him, “let’s be honest, you all don’t need me anymore”. I purposefully put myself out of job. But boy did I have a story to tell during behavioral interviews at my next job at the startup and my interview for my job at BigTech after I left the startup.

Re: AI agents are starting to eat SaaS

#196

Post by throwaway613745 »

Not for my company. In my research AI is just completely incapable of doing what we do in a cost effective way and our customers don’t have the technical know-how to vibe an alternative.

Our customers ask for about AI features and it’s a constant struggle to explain to them that they just aren’t there yet.

Re: AI agents are starting to eat SaaS

#198

Post by agwp »

Crowberry wrote: post #136
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.…

I second this. Most of our customers IT department struggle to look at the responses from their failed API calls. Their systems and organisations are just too big. As it stands today; just a bit of complexity is all that is required to make AI Agents fail. I expect the gap to narrow over the years of course. But capturing complex business logic and simplifying it will probably be useful and worth paying for a long ti…

Also, for many larger companies, access to internal data and systems is only granted to authorized human users and approved applications/agents. Each approval is a separate request.

This means for any "manual" or existing workflow requiring a access to several systems, that requires multiple IT permissions with defined scopes. Even something as simple as a sales rep sending a DocuSign might need:

- CRM access

- DocuSign access

- Possibly access to ERP (if CRM isn't configured to pass signed contract status and value across)

- Possibly access to SharePoint / Power Automate (if finance/legal/someone else has created internal policy or process, e.g. saving a DocuSign PDF to a folder, inputting details for handover to fulfilment or client success, or submitting ticket to finance so invoicing can be set up)

Re: AI agents are starting to eat SaaS

#199

Post by mattmanser »

torginus wrote: post #192
mattmanser wrote: post #169

Earlier quoted context omitted.

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 goi…

I am speaking from experience. We have a SaaS tool for example to to CI/CD. It's super expensive, has a number of questionable design choices. It's full of features, half of which either do not work, or do not work as expected, or need some arcane domain knowledge to get them working. These features provide 'user-friendly' abstractions over raw stuff, like authing with various repos, downloading and publishing packag…

That's my point, "It's full of features". You said it yourself.

You have bought a shallow but wide SaaS product, one with tons of features that don't get much development or testing individually.

You're then trying to use it like a deep but narrow product and complaining that your complex use case doesn't fit their OK-ish feature.

MS do this in a lot of their products, which is why Slack is much better than Teams, but lots of companies feel Teams is "good enough" and then won't buy Slack.

Re: AI agents are starting to eat SaaS

#200

Post by j45 »

Havoc wrote: post #189
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.…

That may well be an exception though. I'd imagine most SaaS builders are very much figuring things out as they go rather than starting with deep domain expertise

Deep domain expertise is not common enough.
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