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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

#271

Post by reactordev »

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.…

Damn, reading this is clear you two know your market well. Congratulations. This is the right way to do it. Domain expertise + tight feedback loop, probably makes customers feel like they are part of the process and that you’re there for them. Are you hiring?

Re: AI agents are starting to eat SaaS

#272

Post by mjr00 »

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…

> So the simpler problem is that your product now becomes merely a tool call for AI agents. That's what users want.

This is a big assumption, and not one I've seen in product testing. Open-ended human language is not a good interface for highly detailed technical work, at least not with the current state of LLMs.

> It's the same reason why API access to SaaS is usually restricted or not available for the users except biggest customers.

I don't... think this is true? Of the top of my head, aside from cloud providers like AWS/GCP/Azure which obviously provide APIs: Salesforce, Hubspot, Jira all provide APIs either alongside basic plans or as a small upsell. Certainly not just for the biggest customers. You're probably thinking of social media where Twitter/Reddit/FB/etc don't really give API access, but those aren't really B2B SaaS products.

Re: AI agents are starting to eat SaaS

#273

Post by martinald »

OxfordOutlander wrote: post #154
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 agree about boutique software, but see the development still being external - To attempt to summarize the debate, there seems to be three prevailing schools of thought: 1. Status Quo + AI. SaaS companies will adopt AI and not lose share. Everyone keeps paying for the same SaaS plus a few bells and whistles. This seems unlikely given AI makes it dramatically cheaper to build and maintain SaaS. Incumbents will save o…

Author here, really good comment and I agree with you.

What _has_ surprised me though is just how many companies are (or are considering) building 'internal' tooling to replace SaaS they are not happy with. These are not the classic HN types whatsoever. I think when non technical people get to play with AI software dev they go 'wow so why can't we do everything like this'.

I think your point 3 is really interesting too.

But yes the point of my article (hopefully) wasn't that SaaS is overnight dead, but some thin/lower "quality" products are potentially in real trouble.

People will still buy and use expertly designed products that are really nice to use. But a lot of b2b SaaS is not that, its a slow clunky mess that wants to make you scream!

Re: AI agents are starting to eat SaaS

#274

Post by mlinhares »

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'm going to predict there will be a movement into "build it in house with LLMs", these things are going to be expensive, they are going to fail to deliver or be updated and there will be a huge bounce back. The cost of writing software is very small, the cost of running and scaling it is there the money is and these people can't have their own IT teams rebuilding and maintaining all this stuff form scratch.

A lot of them will try though, just means more work for engineers in the future to clean this shit up.

Re: AI agents are starting to eat SaaS

#275

Post by martinald »

ethbr1 wrote: post #207
Havoc wrote: post #189

Earlier quoted context omitted.

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

Additional hot take: deep domain expertise is only value-add while actively adding new features There's a huge subset of SaaS that's feature-frozen and being milked for ARR.

Agreed. This is why PE buys so many SaaS companies!

My article here isn't really aimed at "good" SaaS companies that put a lot of thought into design, UX and features. I'm thinking of the tens/hundreds of thousands+ of SaaS platforms that have been bought by PE or virtually abandoned, that don't work very well and send a 20% cost renewal through every year.

Re: AI agents are starting to eat SaaS

#276

Post by nkotov »

I worked at a couple of companies that tried to do internal LOB apps. Every single time, these projects have failed because the cost to maintain usually is more than just paying a subscription fee to a third party.

Re: AI agents are starting to eat SaaS

#277

Post by rapind »

wouldbecouldbe wrote: post #259
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.…

Yeah I think the real values is for the Solo developers, indie hackers & side projects. Being unrestrained by team protocols, communications, jira boards, product owners, grumpy seniors. They can now deliver much more mature platforms, apps, consumer platforms without any form of funding. You can easily save months on the basics like multi tenant set up, tests, payment integration, mailing settings, etc. It does seem…

As a solo grumpy senior, I've been pumping out features over the past 6 months and am now expanding into new markets.

I've also eliminated some third party SaaS integrations by creating slimmer and better integrated services directly into my platform. Which is an example of using AI to bring some features in-house, not primarily to save money (generally not worth the effort if that's the goal), but because it's simply better integrated and less frustrating than dealing with crappy third-party APIs.

Re: AI agents are starting to eat SaaS

#278

Post by agentultra »

ethbr1 wrote: post #258
agentultra wrote: post #254

Earlier quoted context omitted.

This seems to assume that these non-technical people have the expertise to evaluate LLM/agent generated solutions. The problem of this tooling is that it cannot deploy code on its own. It needs a human to take the fall when it generates errors that lose people money, break laws, cause harm, etc. Humans are supposed to be reviewing all of the code before it goes out but you’re assumption is that people without the ski…

I think you're underestimating (1) how bad most B2B is (from a bug and security vulnerability perspective) & (2) how little B2B companies' engineers understand about how their customers are using their products. The frequency of mind-bogglingly stupid 1+1=3 errors (where 1+1 is a specific well-known problem in a business domain and 3 is the known answer) cuts against your 'professional SaaS can do it better' argument…

I’m just imagining the sweat on the poor IT managers’ brow.

They already lock down everything enterprise wide and hate low-code apps and services.

But in this day and age, who knows. The cynical take is that it doesn’t matter and nobody cares. Have your remaining handful of employees generate the software they need from the magic box. If there’s a security breach and they expose customer data again… who cares?

Re: AI agents are starting to eat SaaS

#279

Post by phendrenad2 »

Aurornis wrote: post #89
phendrenad2 wrote: post #68

Earlier quoted context omitted.

Ironically (for you), copilot is the one provider that is doing a good job of provably NOT training on user data. The rest are not up to speed on that compliance angle, so many companies ban them (of course, people still use them).

Do you have a source for this? There are claims all through this thread that “AI companies” are probably doing bad things with enterprise customer data but nobody has provided a single source for the claim. This has been a theme on HN. There was a thread a few weeks back where someone confidently claimed up and down the thread that Gemini’s terms of service allowed them to train on your company’s customer data, even…

Sources aren't hard to find[1]. But getting software developers to look outside their idiot-savant caves and not dismiss the entire legal system as "unrealistic", is much harder to accomplish.

[1] - https://www.microsoft.com/en-us/trust-center/privacy/data-ma...

Re: AI agents are starting to eat SaaS

#280

Post by therealwhytry »

adventured wrote: post #246
indymike wrote: post #240

Earlier quoted context omitted.

> I believe that agents are a multiplier on existing velocity, not an equalizer. Development tooling improvements usually are a temporary advantage end up being table stakes after a bit of time. I'm more worried that as agentic tooling gets better it obsoletes a lot of SaaS tools where SaaS vendors count on users driving conventional point and click apps (web, mobile and otherwise). I'm encouraging the companies I'm…

What I'm seeing Ad infinitum on HN in every thread on agentic development: yeah but it really doesn't work perfectly today. None of these people can apparently see beyond the tip of their nose. It doesn't matter if it takes a year, or three years, or five years, or ten years. Nothing can stop what's about to happen. If it takes ten years, so what, it's all going to get smashed and turned upside down. These agents wil…

You aren't wrong, but you’re underestimating the inertia of $10M+/year B2B distributors. There are thousands of these in traditional sectors (pipe manufacturing, HVAC, etc.) that rely on hyper-localized logistics and century-old workflows.

Buyer pressure will eventually force process updates, but it is a slow burn. The bottleneck is rarely the tech or the partner, it's the internal culture. The software moves fast, but the people deeply integrated into physical infrastructure move 10x slower than you'd expect.

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