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AI is killing B2B SaaS

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Re: AI is killing B2B SaaS

#381

Post by Aperocky »

AlienRobot wrote: post #270
risyachka wrote: post #253

Earlier quoted context omitted.

In any usable product making a product is like 20% or less. Enter compliance, security, payments and a million other things. Even if you can build it in a day B2B SaaS will continue to prosper because they sell peace of mind, reliability and compliance. Not features. Also due to economy of scale it will always be cheaper to buy something from a vendor that sells it to many clients than to DIY it.

Yep. It's a funny thing. You build a Twitter. Profiles have posts, posts can have images, etc. It's very easy to model the database. But then how do you make money with it? Now you need to build a separate system for advertising? Or do you want to sell subscriptions? Which means you need to build a separate system to handle payments. This is usually the big one, because when you handle money, what happens if there is…

It's still possible. Have the product and hire other people for these things.

Use stripe, cloudflare, whatever the legal equivalent of these stuff, S3.

Yes they might take most potential profit, but you'll also not have a huge payroll.

Re: AI is killing B2B SaaS

#382

Post by btown »

> What they don’t know, though, is that a poorly architected system will fail, eventually. As every senior programmer (eventually) understands, our job is complex because we have to understand the relationships in the real world, the processes involved, and the workflows needed, and representing it in a robust way to create a stable system. AI can’t do that.

I have a strong feeling the future's going to look like this:

Company vibe codes to replace a SaaS.

Little do they know this creates a time bomb: fragile systems where fundamental architectural defects are papered over by humans who knew the underlying dynamics but didn't articulate them well enough during the initial "vibe-architecture," so they're forced to patching the "impedance mismatches" with data entry or with even more vibe coding.

Those humans are eventually laid off, because of course they are. Data quality rapidly deteriorates. Operational mishaps deteriorate relationships with human counterparties. Defects begin to cost thousands to millions.

Suddenly, there's demand: not for SaaS, but for actual service businesses. Consultancies that can parachute in, do actual domain-driven design, and un-vibe that code. They do have a stronger-than-ever pool of out-of-work engineers (many from the failed SaaS companies).

The SaaS companies that survive understand that the first S no longer stands for Software; it stands for Solutions.

Re: AI is killing B2B SaaS

#383

Post by GoatInGrey »

torginus wrote: post #344
thallavajhula wrote: post #343

I was reading through the article and waiting for the key info to drop, but nope. It never did. It seemed like marketing fluff. If anything, vibe coding may eliminate some of the B2C SaaSes, but not B2B. If you think an enterprise is going to vibe code a B2B offering that they pay millions for, you're out of your mind. Here's my general mantra regarding AI: NEVER take suggestions about AI from people who have a veste…

> Here's my general mantra regarding AI: NEVER take suggestions about AI from people who have a vested interest in it I get where you're coming from, but let's say you're talking to a HVAC installer, and he recommends you a system to get - I'm sure there's financial self-interest on his part, but I do like to think that he knows quite a bit about what he does, and believes what he's selling is genuinely good stuff (a…

The analogy can work if you're not looking for an HVAC at all and the HVAC guy is instead approaching you, unprompted, to explain that you need to buy this new system. Because if you don't, your business will become uncompetitive and fail.

Re: AI is killing B2B SaaS

#384

Post by misiti3780 »

sbarre wrote: post #173
misiti3780 wrote: post #164

Earlier quoted context omitted.

sorry, what do you mean?

1. Enthusiastic employee (vibe-)codes a replacement for a turnkey SaaS product that the company uses. 2. Company uses it, maybe even starts to rely on it for important business operations, and for a time the employee supports that app. 3. Bugs creep in, feature request pile up. 4. Employee either leaves the company or moves on to another project. 5. Pain

ya ok, this makes total sense. i agree.

Re: AI is killing B2B SaaS

#385

Post by misiti3780 »

bandrami wrote: post #210
misiti3780 wrote: post #164

Earlier quoted context omitted.

sorry, what do you mean?

If software already exists that does X, X is a solved problem. You didn't hire a developer to solve already-solved problems.

ya, i agree. but in your world, this company will fail https://glue.ai/ ?

Re: AI is killing B2B SaaS

#386

Post by ghshephard »

zipy124 wrote: post #354
ghshephard wrote: post #327

Lot of places that I see AI disrupting - I'm not buying that SaaS is going to be a significant one. Reading through the article: > They were paying $30,000 to a popular tool3 Couple things we needed to understand here: - How large is the client company - Is that $30,000/month or day or hour.... If it's a technology company of > 1000 employees - then $30,000 month doesn't even get Finance's attention. And there is nex…

Yeh but in a company of 100 employees for software of 30k a year, it's more than worth it to take your standard 50k (GBP) dev and have them replaced it. It's a one time cost, and the support time will certainly be less than 50% of their time every year so it saves money. There are many companies that operate like this all over the world. Outside of the hyper-growth tech VC world cutting costs is a very real target an…

$30k/year? For 100 Employees. So - $25/seat?

I can't imagine it would ever be worth, under any scenario, trying to write/build/support any $25/seat SaaS software for any company I've worked at in 25+ years.

Another thing to keep in mind - very little of the cost of a SaaS license is the time it takes to build the software. Security, Support, Maintenance, Administration, backups/restores, testing/auditing said backups/restores, etc, etc.. and then x-training new SREs on how to support/manage this software, ...

Even as someone who spend 10+ hours a day churning out endless LLM applications, products, architectures from my myriad of Cursor/Codex/CC interfaces and agents - I'm dubious that LLMs will ever eat into SaaS revenue.

I'm sure (lots of) people will try - and then 1-2 years in someone will look at the pain, and just pull the ripcord.

Re: AI is killing B2B SaaS

#387

Post by Ronsenshi »

vdfs wrote: post #254
DebtDeflation wrote: post #234

Earlier quoted context omitted.

It's shocking to me how prevalent this "who needs Salesforce when everyone can just vibe code their own CRM from scratch in a day" narrative has become in the business press. Like, what???

That's not like "Who need Photoshop everyone can just vibe code their own photoshop" They could just download GIMP or find cheaper alternative, that was always an option

I've had a pleasure of using GIMP recently on Mac. One of the worst UX/UI experiences I've had in quite a while. If that's where vibe coding leads to, then Photoshop is very safe from disruption.

Re: AI is killing B2B SaaS

#388

Post by pcurve »

paxys wrote: post #140

While the author is wildly overstating things, I do think AI is striking at the heart of the SaaS problem, which is the business model of "pay us $10-100+ per employee per month in perpetuity or we will hold all your data and your company's operations hostage". There is always going to be value in good software, but it is shitty vendors relying on the lock-in effect that are in danger. And good riddance. The other is…

Agree on the valuations. Most have come down and many have overcorrected imho.

As expensive as some of these software seem in terms of cost per seat, most of the subscription contract rarely exceed a few hundred thousand / year if even $1mm, which is drop in a bucket for many companies. (vs running on-prem servers, having staff to support them)

You'd think Atlassian would be printing money given everybody under the sun is using them, but they only make $5B in annual revenue.

I've worked at fortune 50 companies for a while and custom enterprise software is still alive and well for things that are too business specific to buy off the product for. But they're not going to be in a rush to create their own Workday, Salesforce, Jira, Figma, SAP, etc.

Re: AI is killing B2B SaaS

#389

Post by hunterpayne »

sdf2erf wrote: post #268
IhateAI wrote: post #156

Earlier quoted context omitted.

Yeah, also if a SaaS costs, 10k a year, I promise its not not more cost effecient to pull your 10k a month engineer off their usual work to build and then maintain some vibe coded slope everytime an edge case occurs. Also many customers of SaaS have little to zero engineering staff, they are in construction, resturaunts, law offices ect. These takes are so assanine.

Is there a place on the internet where folks like yourself, who seemingly have a way to think economically congregate? I personally dont know of one, for which if I did, I wouldnt visit here anymore. So many takes on here are so lazy and simpleton that when you go a few levels deeper all the flaws get exposed.

Its called PolyMarket

Re: AI is killing B2B SaaS

#390

Post by groundzeros2015 »

bandrami wrote: post #372
groundzeros2015 wrote: post #332

Earlier quoted context omitted.

> "just do the parts of it we actually use". 25 years here. You can absolutely do this. Most software is orders of magnitude more complex than it needs to be. The junior programmer you are talking about who wanted to rewrite it in a weekend tends to come back with a working program, not empty handed.

Yes, I didn't really doubt the developer could do it, the problems are: 1. That's not a great use of the developer's time, and 2. anything in-house increases our training and support costs

And both are completely different arguments then your original post.
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