Teams I've worked in choose SaaS offerings based on how little expertise we have in the given domain, and the price (which includes actual monies going to the SaaS, but also the expected time of integrating with them and an expectation cost of migrating away from them).

Experienced developers have the humility to understand that there are always roadbumps and risks in building a system in a domain we do not understand, and therefore paying another company with expertise can often be worth it. Obviously some SaaS companies are better than others, which is why there is an evaluation process.

It does not surprise me (unfortunately) that proponents of using AI agents for everything minimize the value of actual lived experience in working in a given domain.

"It was always possible to clone software, but doing so was costly and time consuming, and the clone would need to be much cheaper, making any such venture financially non-viable.

With AI, that equation is now changing. I anticipate that within 5 years autonomous coding agents will be able to rapidly and cheaply clone almost any existing software, while also providing hosting, operations, and support, all for a small fraction of the cost.

This will inevitably destroy many existing businesses. In order to survive, businesses will require strong network effects (e.g. marketplaces) or extremely deep data/compute moats. There will also be many new opportunities created by the very low cost of software. What could you build if it were possible to create software 1000x faster and cheaper?"

Paul Bucheit

https://x.com/paultoo/status/1999245292294803914

Not for my company. In my research AI is just completely incapable of doing what we do in a cost effective way and our customers don’t have the technical know-how to vibe an alternative.

Our customers ask for about AI features and it’s a constant struggle to explain to them that they just aren’t there yet.

Related, Microsoft CEO said that soon the biggest client of Microsoft is going to be agents, not humans.

This article seems to suggest that businesses are going to swap domain-specific SaaS tools, written and tested by people knowledgable in the domain with specific SLAs for vibe coding everything. But your AI subscription is still a SaaS?

All you've done is swapped a SaaS built for your problem domain with another, more expensive SaaS that has no support at all for your actual problem. Why would anyone want that? People buy SaaS products because they don't want to solve the problem, they just want it fixed. AI changes nothing about that.

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.

SaaS was always just a transitional phase between desktop software and... this. We built entire businesses around being the interface layer, but if AI can interact with APIs directly, that whole layer gets compressed.

The optimistic angle nobody's exploring: maybe 'eating SaaS' means we finally escape the subscription hellscape where every basic function costs $29/month. If an AI agent can stitch together free/cheap APIs instead of forcing you into Notion/Airtable/Whatever, that's not destruction—that's evolution.

Really interesting read, thank you! I'm currently working for a very traditional SaaS company (let's call us FooBar for the discussion), and I can say that this fear is very real. We talk a lot about the "FooBar killer" which is a theoretical startup company working right now on a better solution than ours. We know that there are a few of those and we even started working on one of our own exactly because of that. If you can't beat the "engineers with a spare Friday afternoon" you might as well join the attempt to replace you.

Vibe Coding is so easy nowadays, I coded an app almost by mistake. I put a short cryptic prompt into Kim2 to see how it would respond and it immediately (and very much to my surprise), coded an entire website with the functionality I was thinking about.

It wasn't even a coherent grammatically correct sentence that I entered and it busily went to work building the site I had in mind.

It's not hard to imagine that in the next 2-3 years, anyone will be able to build personalized apps on request.

> most SaaS products contain many features that many customers don't need or use. A lot of the complexity in SaaS product engineering is managing that - which evaporates overnight when you have only one customer (your organisation).

This is the key point. Sure, you don't have the chops to be able to replicate the SaaS product locally with Claude/Gemini, but you don't have to, because you're no trying to make a product that can handle N+1 workflows.