r/stocks
"AI is killing (seat-based) SaaS" is stupid.
SaaS insider debunks AI killing seat-based SaaS, noting increased usage/spend and the resilience of systems of record like CRMs.
- Enterprises prefer focusing on core business rather than dedicating expensive engineers to build custom AI tools.
- AI integration via APIs increases user interaction, driving up both AI credit spend and seat counts.
- Systems of record are deeply embedded and too painful/risky to replace, making them highly resilient to AI disruption.
I work in SaaS. Here are the fears, debunked one by one:
- People will vibecode their own SaaS
Wrong. Cheaper software has always existed alongside the SaaS incumbents. People pick the incumbents still for a reason. Any growing business, especially at scale, would do better to focus on growing their core business rather than to dedicate expensive resources (engineers) to go on sidequests to vibecode all their SaaS.
- AI will replace humans, thus cannibalizing seats.
What we're seeing anyway is that people are actually spending more. Because all the SaaS companies are exposing their workflows & data via API/CLI/MCP, all the humans are now accessing all of the functionality through their native chat clients like claude & chatGPT. what happens here is because it's so easy to interact with SaaS (you don't even have to login to ask "what's going on with this latest lead?") you end up asking and doing ALOT of work. AI credit spend is going way up, WITH seats.
There is a doomsday scenario here - if AI replaces all white-collar workers entirely, then yes, seats are dead. But if all white-collar workers are out of work, we'll have bigger problems as a society.
- The AI labs are coming for SaaS.
Possibly for some. Claude Design is certainly coming after Figma. What's less likely to be replaced are the systems of record (e.g. CRMs like Salesforce and Hubspot, HCM tools like Workday, Oracle, SAP) because ripping these out is really painful, and any security lapse of any sort (especially from a vibecoded tool) is tantamount to organizational suicide (think banks, etc.) We have an investor deck that shows a survey of 500+ companies asking them what they're thinking of replacing in the next 5 years. The lowest category was systems of record.
Exactly, SaaS had high multiples because of high margins and consistent high growth. Now that the high margins and growth are called into question it makes sense that SaaS may derate permanently.
It may not be as crazy doom and gloom as people are claiming but going from 20-30% annual growth to 5-10% growth can see multiples drop significantly.
maintained for 300k/year? So one engineer? ya that’s not happening lol
I bet the 300k was token usage projection 🤣
Migrated all the data from Salesforce objects to our Azure DB before transition. Copied the Salesforce objects/tables schema 1:1, for the new system. New system writes to the tables migrated to Azure DB, with the exact same column structure.
From my perspective, which is financial controlling/sales analytics teams, not much has changed i just query the new table instead of the Salesforce object.
Didn’t snowflake wiped some company’s entire records?
What do you mean raw quality?
Here is an example of improvements, let say you have a trillion parameters, but you only run 100 billion of them that are relevant to the work currently being done.
Do you honestly think the only improvment that have been made to LLMs is adding more parameters?
companies relearning old lessons, tale as old as history.
Exactly this. AI already is, and will become exponentially more effective in building and implementing the software and technical infrastructure, but this is only part of a business. People overestimate the disruptive power in that sense. Surely a lot of lesser SaaS companies will go out of business, but the bigger players have vast advantages in their reach, trust, and interconnectedness and can leverage this to compete with startups, especially considering they're using AI to the fullest themselves.
I think the poeple creating products from ai are often the tech enabled end users of existing Saas products with missing features. Possibly ai makes it more difficult to roadmap features or up sell accounts when clients just vibe code their own solutions
Right. Saas isn't doomed. But most Saas companies were at too high a premium in 24.
Stick to PCB’s and not licensing agreements 👋
Developing products was never an issue. If not 5-7 people, even 100 people would have done the damage already without AI or with minimal use of AI. Doing business involves other risks, like having accountability, talking to people to get things done, execution, resolving issues, and lot more. That's the part AI can't replace and it is way more than 60% of the work.
When I have an issue and call, I keep saying 'talk to an agent's until I find a human. If I can't, I'll close the account with that company. I'll be so pissed if I receive automatic replies when my questions are not standard and bots can't answer them and keep giving replies in circles. Pretty sure everyone else share the same frustration.
So, development bottlement was never a big issue in the past.
Sarcasm isnt a smart response or serious counter argument.
It's tit for tat, nothing in what I replied to invalidated what I was saying. It's just kind of nonsense rationale without substance