Is SaaS dead?

Many SaaS stocks have been getting clobbered in public markets. Some see the “end of software“.

Is SaaS dead?

What seems to be happening:

  • tough macro, cost cutting
  • AI sucking the air out of the room
  • SaaS vendors perceived as “last generation” despite best efforts to add AI quickly
  • enterprise budgets for AI are not net new, they’re taken from somewhere (SaaS budgets cut)
  • Bulk of budgets going to OpenAI/Azure etc because low hanging fruit to “do AI” (knowledge bot, coding)
  • for the more specialized enterprise apps, customers feel like they can/should “build” internally rather than “buy”

What happens next:

  • customers realize that “build” is a headache, not always the best option
  • OpenAI / Azure etc can’t / doesn’t want to build hundreds of problem specific/ vertical specific apps
  • Takes time, but legacy and new SaaS companies truly become AI-first (not just marketing), abstract away complexity of deploying LLMs
  • macro environment eventually rebounds
  • AIaaS becomes the new SaaS – what is old is new (unedited Sat morning thoughts)
  • Question is what happens to all current SaaS unicorns and public companies as this transition happens

(unedited Saturday morning thoughts)

Leave a Reply

Your email address will not be published. Required fields are marked *