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r/valueinvestingr/valueinvesting· u/Last-Cat-7894· 5d agoQuestion / Help 37

A question to those working closely with various SAAS products

Investor summaryNeutral

Investor asks if AI tools or cheaper alternatives are disrupting legacy SaaS providers like Microsoft for enterprise and SMB users.

Bear points
  • Legacy SaaS providers face potential disruption from AI tools and LLMs.
  • Risk of enterprise and SMB customers migrating to cheaper or newer AI-enabled alternatives.
MSFTAI 资本开支
Post body

I don't work in software. I'm in the military, and the only publicly traded software provider I regularly use through my job is the standard Microsoft Office suite, AFAIK. My specific job is pretty niche, so I don't really have a feel for the "pulse" in any particular industry (before you ask about defense tech or whatever, I promise you any real cutting edge, large scale information is way above my pay grade lol).

I'm curious to see if anyone on this sub works with any software provider day in and day out, or better yet, is involved in the decision making that determines budget/seat count? Bonus points if you are not just using the software yourself, but actively making decisions that affect multiple people or entire teams.

If you do have some insights in the enterprise space, I'd love to pick your brain. Have any real conversations in your business happened around replacing current providers with AI tools/LLM's? What about newer, more AI enabled competitors? What about just straight up cheaper alternatives? Has your company actively cancelled any major subscriptions or done any mass migrations off of one provider, or has there at least been talks of doing it?

For the smaller entrepreneurs or SMB professionals using lighter, more application-layer tools, what have you noticed? For example, could you ever see yourself switching away from QuickBooks or the Adobe creative suite or Hubspot's platform? Have you noticed other people in your field shifting away from the legacy players in favor of newer entrants? If you had to start your business/hustle over from scratch, would you still choose the established players or would you look toward newer, fresher offerings?

I understand that all of this is going to be somewhat anecdotal. I'm just trying to get the perspective from someone actually using these tools to conduct business. I get the feeling that a good chunk of the disruption narrative comes from the investing community rather than the ones on the ground actually doing the work. However, the bias from my own feelings on the narrative (as well as my own portfolio) could very well be blinding me to what is actually happening. Appreciate your collective input!

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