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.

I often give the follow analogy which I think is a good proxy to what is going on.

Spreadsheets! They are everywhere. In fact, they are so abundant these days that that many are spawned for a quick job and immediately discarded. In fact, the cost of having these spreadsheets is practically zero so in many cases one may find themselves having hundreds if not thousands of them sitting around with no indication to ever being deleted. Spreadsheets are also personal and annoying especially when forced upon you (since you did not make it yourself). Spreadsheets are also programming for non-programmers.

These new vibe-coded tools are essentially the new spreadsheets. They are useful,... for 5 minutes. They are also easily forgettable. They are also personal (for the person who made them) and hated (by everyone else). I have no doubt in my mind that organisation will start using more and more of these new types of software to automate repetitive tasks, improve existing processes and so on but ultimately, apart from perhaps just a few, none will replace existing, purpose-built systems.

Ultimately you can make your own pretty dashboard that nobody else will see or use because when the cost of production is so low your users will want to create their own version because they would think they could do better.

After all, how hard is to prompt harder then the previous person?

Also, do you really think that SaaS companies are not deploying AI themselves? It is practically an arms race: the non-expert plus some AI vs 10 specialist developers plus their AIs doing this all day long.

Who is going to have the upper-hand?

This is why I started working on an open source, generic protobuf sqlite ORM + CRUD server (with search/filtering) + type/service registry + grpc mesh, recently: https://github.com/accretional/collector Note: collector's docs are mostly from LLMs, partially because it's more of a framework for tool-calling LLMs than humans

Then this project lets you generate static sites from svelte components (matches protobuf structures) and markdown (documentation) and global template variables: https://github.com/accretional/statue

A lot of the SaaS ecosystem actually has rather simple domain logic and oftentimes doesn't even model data very well, or at least not in a way that matches their clients/users mental models or application logic. A lot of the value is in integrations, or the data/scaling, or the marketing and developer experience, or some kind of expertise in actually properly providing a simple interface to a complex solution.

So why not just create a compact universal representation of that? Because it's not so big a leap to go beyond eating SaaS to eating integrations, migration costs/bad moats, and the marketing/documentation/wrapper.

AI coding IS SaaS. Claude Code is a subscription service I pay to create the exact, niche, I need you to build a form that submits a blog post to Wordpress here’s my api key, here’s the word doc format it comes in, I’ll paste it in the chat and you make a paste from word button so I don’t have to manually enter the form and it works first try. That is the definition of software as a service. And it’s mine and it’s exactly what I need. Tomorrow I’ll need something else…

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.

The problem is that we are still talking only about software. If that is the only thing agents can do then they are just better IDE’s for programmers. This would be an enabler for building stuff faster. Think about it, there is already a huge market for SAAS, but most of the companies have contracts in place, so what we’ll have is just more competition which will drive prices down. Companies will not start changing internal tools, refactoring is a bad investment in general, if you choose that over some new features or products it signals larger issues, so nobody will replace existing cheap stuff that is working.

Going back to the beginning, I think we just lack good tools for other cases where agents could be used. Copilot is not great, chatgpt alone lacks some features to use it for business as is. I think what will happen is that we will see a lot more new tooling pop up that relies on agents in niche markets which will just amplify the power users. It will be another category of SAAS the companies will adopt.

You can already hire Indians to make your own HR system. People still choose SAAS, because the system already works.

You do not want to have to plan out a system with 800 unique requirements yourself. It takes a ridiculous amount of work, and you are then stuck maintaining it.

It’s never been about the difficulty of programming, it’s been about the pain of designing and maintaining.

Ah, yes. If the thing that is false is true, all kinds of interesting things happen! For example, if I became the queen of France, I could make people do silly dances! That is an interesting hypothesis that could play out in my imaginary world!

SaaS maintenance isn't about upgrading packages, it's about accountability and a point of contact when something breaks along with SLAs and contractual obligations. It isn't because building a kanban board app is hard. Someone else deals with provisioning, alerts, compliance, etc. and they are a real human who cannot hallucinate that the issue has been fixed when it hasn't. Depending on the contract and how it is breached, you can potentially take them to court and sue them to recover money lost as a result of their malpractice. None of that applies to a neural network that misreads the alert, does something completely wrong, then concludes the issue is fixed the way the latest models constantly do when I use them.

I dont think any opinion right now is going to be definitive. This is like mixing paint, the edges are still white, while the centre is colored.

What Iam seeing is that customers are delaying purchases of large expensive software. Prime example; SAP. ECC migrations to SaaS model RISE/GROW-PublicCloud are stalling, same with onprem S4 to RISE. I see a whole bunch of my customers instead go with retaining the core but modernize surround apps with intelligent custom apps without feature bloat. For now, SAP/oracle/whatever remains the system of record, the edges are going away. I guess the same is likely happening in other spaces.

This change is coming. Definitely. The current moats around SaaS will fall and the alternate ecosystem might not have moats at all.

There are already plenty of SaaS that offer open source version as a way to push to the cloud and charge for hosting, maintenance, support and some extra features. In that way, a working code have already been commoditized and those companies didn't disappear.