I predict the fallout from this is companies being nickel & dimed to death by a million smaller subscriptions (rather than just cutting a huge check to Workday, ServiceNow, SAP, Oracle or similar). There is such a glut of AI ISV startups that are filling highly specific niches, and some are quite good, but they're all usually in the $10-50/mo/user. Gets to be big numbers pretty quickly in a large enterprise.
AI is killing B2B SaaS
361–370 of 752 posts
Re: AI is killing B2B SaaS
#362Earlier quoted context omitted.
> We are certainly closer now to being able to prototype and go to market faster with a product. What are the higher-order effects when anyone can do this, and *aaS becomes a market for Lemons?
in the 90-ies anyone could easily prototype with tools like Access (and all the other "4GL" tools which were similarly all the rage back then). That still didn't preclude companies from buying their major software from software vendors instead of doing it themselves. In some sense having customer able to prototype what they want is a good thing. I did it myself as i was at the time on that side, and having a quick-wh…
Access is not as dead as you might hope. The long tail of internal tools written with Access continues to shamble along. I had to figure out how to dump MDB files on Windows last year for just this reason. As an industry I think we often fail to grasp how much outsider art there is, in the form of internal departmental tools.
LLM coding is going to create a cambrian explosion of these tools. It’s going to be very interesting to see the remnants of this wave 30 years down the line.
Re: AI is killing B2B SaaS
#363Earlier quoted context omitted.
I think that just because anyone can do it, doesn't mean they will. Lots of people have really great ideas but very few actually commit to execution. Ultimately ROI will go down, deincentivizing the commercialization of that thing someone wanted to bang out in a weekend. In the very long term, software will become a commodity, as you mentioned. Process and workflow may move into JIT delivery for the need at hand, in…
> Lots of people have really great ideas but very few actually commit to execution. This is true when you had to work hard for those ideas. Now you have LLMs. It means more people can sling a lot more crap at walls with fewer barriers to entry.
here's reality before claude:
- nearly every enterprise IT project is a failure anyway
- "can i do this for free?" savvy people write "thing i don't want to pay for github".
- ??? "stupid smelly nerds!" (https://www.reddit.com/r/github/comments/1at9br4)
okay, what was the actual obstacle? it's really simple: in order to use something FREE, you had to touch GITHUB, which meant GIT. and people hate git.
today, with LLMs:
- "can i do this for free?"
- LLM dutifully does the needful, using projects it finds and code it learned from github, and doing the prosaic tasks of launching them for you, whatever that means.
people are getting way up into their heads about what matters, psychosocial and management and whatever bs. chatgpt is FREE. it will fix your problems for FREE. people will put up with ANYTHING for FREE.
the real innovation is laundering all that inaccessible, pre-existing solution space into a format that doesn't require transiting git and giving it away for free.
don't believe me? all of the most profitable SaaS businesses in technology are the packaging, deployment and customization of pre-existing open source free software, whether it is linux, kvm, postgres, etc. they are factories to turn stuff that is inaccessible because it is in GIT, which SUCKS - that is the hard part for people to wrap their minds around, that GIT sucks - into websites you can pay for. now LLMs do that.
Re: AI is killing B2B SaaS
#364It's a tale as old as time that developers, particularly junior developers, are convinced they could "slap together something in one weekend" that would replace expensive SAAS software and "just do the parts of it we actually use". Unfortunately, the same arguments against those devs regular-coding a bespoke replacement apply to them vibe-coding a bespoke replacement: management simply doesn't want to be responsible…
I totally agree about the management reluctance to just own everything in house. But I think it’s plausible that SaaS companies will be easier to start with AI coding, and with lower costs (thanks to AI) they will be able to get into the black with a smaller addressable market. So each one can have a different mix of fewer features, for different segments of customers, at lower prices. The result would be a loss of p…
The companies that already have a strong in-house team will greatly benefit from AI. Many of those who don't are in that situation because managers have PTSD from so many failed projects.
Half of all projects fail. That's a lot of emotional trauma.
Re: AI is killing B2B SaaS
#365Earlier quoted context omitted.
I like to bring up JIRA example. You could replace it in-house yeah it is just tickets with statuses. /s But then keep in mind one who built the replacement will become the owner of an application that business doesn’t want to pay for and that person will be cost center for the company. That person better get marketing and negotiating skills that Atlassian has on board because that person will be responsible for the…
You guys keep using services like Jira, Salesforce, Stripe, Datadog, etc. While those are definitely the biggest names, I don't think people are referring to those SaaS platforms as the ones they will replace or try to build an inhouse version of. It will be things like ETL pipeline services, data scraping services, maybe some internal analytics SaaS. The niche things that cost a lot because they’re in a sweet spot w…
Yes, but the market is punishing the former right now.
Re: AI is killing B2B SaaS
#366Reminds me of the story of when the Surgeon General (in the US) reported that smoking causes cancer. People stopped smoking immediately, and cigarette sales tanked. The cigarette companies laughed (with all the phlegm in their throats and lungs) and sales came back 1-2 weeks later. I suspect in a few months or a year companies with vibe-coded replacements for SaS products will find they need to go back: But, just lik…
And where are they now (cigarette companies)?
Re: AI is killing B2B SaaS
#367It's a tale as old as time that developers, particularly junior developers, are convinced they could "slap together something in one weekend" that would replace expensive SAAS software and "just do the parts of it we actually use". Unfortunately, the same arguments against those devs regular-coding a bespoke replacement apply to them vibe-coding a bespoke replacement: management simply doesn't want to be responsible…
Think about it differently - let's say a free OSS product can be installed and you can use ALL features except for LDAP (because that's the paywalled portion that requires you to buy it for $25k / month.) Well, with claude, you can download the code, tell it to implement LDAP authentication, and smile all the way to the bank. And for said fortune 500 company, employing an employee to spend 100% of their time maintain…
> an employee to spend 100% of their time maintaining the app at 10k per month
If the cost to the company is $10K a month, the developer's topline salary is $60K, which is going to be a hard hire to make.
And, again, if they can integrate LDAP with an existing software package at that price point, I want them doing something more valuable than that.
Re: AI is killing B2B SaaS
#368Earlier quoted context omitted.
When you’re in the middle of a production down event and your whole team is diagnosing the issue, and your log server is unresponsive, who do you contact for support? No one, you pull an engineer off the production issue to debug the log server, because you need the log server to debug the production servers. See the problem? Edit: to be clear I’m no fan of Datadog and I wish self hosting were an option. I want this…
The old argument for being locked in to legacy software costing 6-8 figures a year was that you had no choice. Now you have a choice! Clearly that is better, and everyone should evaluate that choice on its merits, and the stock market sees that people are voting with their dollars. If your whole sales pitch is "good luck when it breaks!" you might want to reevaluate your business model.
The stock market is trying to predict that people will vote with their dollars in the future. I’m not quite sure people are really replacing enterprise Saas at large corporations yet. It’s more of a projection.
Re: AI is killing B2B SaaS
#369Earlier quoted context omitted.
I think that just because anyone can do it, doesn't mean they will. Lots of people have really great ideas but very few actually commit to execution. Ultimately ROI will go down, deincentivizing the commercialization of that thing someone wanted to bang out in a weekend. In the very long term, software will become a commodity, as you mentioned. Process and workflow may move into JIT delivery for the need at hand, in…
> Lots of people have really great ideas but very few actually commit to execution. This is true when you had to work hard for those ideas. Now you have LLMs. It means more people can sling a lot more crap at walls with fewer barriers to entry.
Good execution doesn't get easier with an LLM.
Re: AI is killing B2B SaaS
#370No.. just.. no.
This will be a thing for like 1, maybe 2 years, then people will realise it doesn’t make sense to spend $50K of time per annum to replace a $500/month subscription for a better product.