Posted by throwawaypm123 16 hours ago
Tell HN: I'm a PM at a big system of record SaaS. We're cooked
BigCo SoRs, differences aside, have historically been a good, low-drama way to make a living in tech. RSUs, ~40-hour weeks, generally smart colleagues, and real problems to solve for F100 customers. Our products work, but are not loved. Enterprise sales runs the show.
I have no concerns about a scrappy AI startup or indie dev replacing us. The real threat is other SoR vendors, the cloud providers, and of course the AI labs themselves. All of them are coming for our SaaS margins, and as an industry we are woefully unprepared.
Every major SoR has its core competency (HR, ERP, CRM, etc.), but also a long tail of lesser-known portfolio products that increasingly overlap with other SoRs and serve as growth vectors. The competition here is only going to accelerate. As a huge enterprise, you’re not going to rip out a component your SoR for a cool startup or a vibe-coded internal tool... but you would seriously consider doing so if the alternative comes from another SoR vendor you use and is cheaper.
The public cloud providers are explicitly positioning themselves as the place where your business data, AI agents/LLMs, and critical applications live. This is on a direct collision course with SoRs’ own AI platform ambitions that they are banking on for growth.
The AI labs themselves have the same ambition. Note where systems of record sit in OpenAI’s Frontier press release marketecture: a dotted, nearly invisible line at the bottom [2].
SoRs aren’t dead, and they’re not being disrupted by vibe coders. But the path forward is brutal.
Which brings me to the hardest point that applies to me as well. SoR teams are not known for fast execution, cutting edge AI adoption, product taste, or engineering excellence. These are exactly the strengths of our new competitors. We also struggle to attract this kind of talent. People who fit that profile go to FAANG or the labs. We could try to compete with RSUs, but those are down ~50% over the past few months, and the industry is under increasing pressure from investors around stock-based comp and M&A in general.
The goal here is an honest take from someone on the inside. There’s a difficult road ahead. I think SoRs will always continue to exist in some form but I don’t think the recent market corrections are overblown.
[1] https://news.ycombinator.com/item?id=46888441 [2] https://openai.com/index/introducing-openai-frontier/
I’ve been following open-source alternatives long before AI and the biggest drawback was bad UI design, but AI makes that easier and now even more open-source alternatives are launching.
The incentives made this the obvious next step. SaaS are not something that continuously needs to made better, but them being publicly traded means they have to. So what do they do? They add more features that most customers don’t need, they put essential features behind a bigger paywall, they enshittify by adding ads or selling your data. As these SaaSes added more features and the configuration to boot, people were already learning to “program” but within their walled gardens. If you’re already learning how to configure these applications, how big of a step is no-code and now asking a terminal agent to build that one functionality you need?
Before AI became big, you could already see YC funding open-source alternatives to popular applications since they also saw this coming. Notice how they’ve slowed that down now because they know it will lead to their own demise.
How I know this was written by a marketing person. Stop grifting, please.