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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

#221

Post by William_BB »

adriand wrote: post #193
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…

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 cer…

I'd argue it's not CEOs job to code his own dashboards...

This sounds like a vibe coding side project. And I'm sorry, but whatever he builds will most likely become tech debt that has to be rewritten at some point.

Re: AI agents are starting to eat SaaS

#222

Post by cpursley »

TeMPOraL wrote: post #168
skywhopper wrote: post #165

Earlier quoted context omitted.

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.

You're probably thinking "SaaS for other tech end users". Most SaaS is not that.

Re: AI agents are starting to eat SaaS

#223

Post by lm28469 »

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. Our end users can't.

Even if they could, the vast majority of them will be more than happy to send $20-100 per month your way to solve a problem than adding it to their stack of problems to solve internally.

Re: AI agents are starting to eat SaaS

#224

Post by CuriouslyC »

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.…

Not sure why the argument is SaaS or build from the ground up. Agents can deploy open source projects and build new featurees on top of them pretty effectively.

I'm gonna go ahead and guess that if you have open source competitors, within two years your moat is going to become marketing/sales given how easy it'll be to have an agent deploy software and modify it.

Re: AI agents are starting to eat SaaS

#225

Post by William_BB »

mikert89 wrote: post #203
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.…

A year or two from now it will be trivial to copy your product

Did you claim the same a year or two ago? Why or why not?

Re: AI agents are starting to eat SaaS

#226

Post by popcorncowboy »

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.…

You'd hear this all the time back when. "Oh you could build Twitter in a weekend". Yes. Also, very no. This mentality is now on agent steroids. But the lesson is the same.

Re: AI agents are starting to eat SaaS

#227

Post by CuriouslyC »

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…

This is true when SaaS is a simple widget for everyone. The problem is that when SaaS becomes a hydra designed to do a million things for a million people, the extra eyeballs aren't helping you, they're creating more error surface.

On top of that, SaaS takes your power away. A bug could be quite small, but if a vendor doesn't bother to fix it, it can still ruin your life for a long time. I've seen small bugs get sandbagged by vendors for months. If you have the source code you can fix problems like these in a day or two, rather than waiting for some nebulous backlog to work down.

My experience with SaaS is that products start out fine, when the people building them are hungry and responsive and the products are slim and well priced. Then they get bloated trying to grow market share, they lose focus and the builders become unresponsive, while increasing prices.

At this point you wish you had just used open source, but now it's even harder to switch because you have to jump through a byzantine data exfiltration process.

Re: AI agents are starting to eat SaaS

#228

Post by CyanLite2 »

It was common in the early 2000s for big companies to have large internal IT teams to build "line of business" apps. Then SaaS came along and delivered LoB apps for a fraction of the price and with a monthly subscription.

Looks like we're headed back to the internal IT days of building customized LoB apps.

Re: AI agents are starting to eat SaaS

#229

Post by dangus »

I’m glad the author of the article mentions a lot of the limitations of this idea, but taking the final sentence:

> But my key takeaway would be that if your product is just a SQL wrapper on a billing system, you now have thousands of competitors: engineers at your customers with a spare Friday afternoon with an agent.

I think it’s pertinent to point out that a lot of SaaS products are aimed at businesses and individuals who don’t have engineers at all.

AI agents aren’t going to disrupt the SaaS market for software intended for businesses like small business retail where the owners and staff have minimal technical knowledge and zero extra time.

I also think that some SaaS products are so cheap that about an hour of effort is too much. Is it worth a month of effort to vibecode a Dropbox alternative? Even some pretty complicated software that is untouchable by agents and engineers’ side projects like the Microsoft 365 suite and Jira are priced at under $20/month/user.

On the other hand, some entrenched solutions that aren’t all that complicated could be finding themselves with new, smaller competitors.

Re: AI agents are starting to eat SaaS

#230

Post by testbjjl »

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.…

Maybe expect more paragraph 2 for flat fees or cheaper as many people who know how to code find themselves without employment?
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