The way that people interact inside of knowledge companies to get things done is itself the fabric of how it operates. A recent SaaS CEO piece here calls is the 'language games'.
One of the things I have started to realize whilst building apps using AI is that you get a bit indulgent when it comes to features. So in my toy project I wanted all sorts of quality of life bells-and-whistles. If this were a proper enterprise application there would have a been a review and priortization process where the merits would be weighted against the cost. In this case the cost is tokens, so fraction of FTE cost. So I just type and it builds. Whilst this is satisfying I am getting the unnerving sense its not going to be good for me (or the toy app) in the long run.
Other comments have mentioned upstream delays in deciding what features to build now that teams can deliver faster - but you bring up another issue around downstream “understanding debt”. How can sales and marketing sell this stuff if they don’t even know what everything does? How does customer service support it? Sure you can just slop-together documentation, blogs, etc but what good are all these extra features if end-users don’t know or just don’t care about them?
Prioritisation due to cost of engineering forces you to think hard about what to build (and thus not to build). If that calculation has now radically changed, which it has, then that presents a whole new risk that has not been thought about extensivley yet but I suspect will be. It might be that customers can develop the thing they want (that say not other customer does) themselves through well defined interfaces but then who supports and maintains that code?
It's an idyllic dream, as long as you don't need to make money!
No one who touches beans makes money. Only the largest multinational traders and cafes. The money from the specialty coffee chain goes to landlords, shipping companies, and equipment manufacturers.
Of course you'll need to live in the tropics too.
For learning about coffee production, the podcast "Making Coffees" by Lucia Solis is excellent (and industry award winning).
I have little doubt where things are going, but the irony of the way they communicate versus the quality of their actual product is palpable.
Claude Code (the product, not the underlying model) has been one of the buggiest, least polished products I have ever used. And it's not exactly rocket science to begin with. Maybe they should try writing slightly less than 100% of their code with AI?
More generally, Anthropic's reliability track record for a company which claims to have solved coding is astonishingly poor. Just look at their status page - https://status.claude.com/ - multiple severe incidents, every day. And that's to say nothing of the constant stream of bugs for simple behavior in the desktop app, Claude Code, their various IDE integrations, the tools they offer in the API, and so on.
Their models are so good that they make dealing with the rest all worth it. But if I were a non-research engineer at Anthropic, I wouldn't strut around gloating. I'd hide my head in a paper bag.
I find the GitHub issue experience particularly hellish: search for my issue -> there it is! -> only comment "Found 3 possible duplicate" Generated with Claude Code -> go to start.
I am constantly amazed how developers went hard for claude-code when there were and are so many better implementations of the same idea.
It's also a tool that has a ton of telemetry, doesn't take advantage of the OS sandbox, and has so many tiny little patch updates that my company has become overworked trying to manage this.
Its worst feature (to me at least), is the, "CLAUDE.md"s sprinkled all over, everywhere in our repository. It's impossible to know when or if one of them gets read, and what random stale effect, when it does decide to read it, has now been triggered. Yes, I know, I'm responsible for keeping them up to date and they should be part of any PR, but claude itself doesn't always even know it needs to update any of them, because it decided to ignore the parent CLAUDE.md file.
Sometimes the agent (any agent, not just Claude — cursor, codex) would miss a rule or skill that is listed in AGENTS.md or Claude.md and I'm like "why did you miss this skill, it's in this file" and it's like "oh! I didn't see it there. Next time, reference the skill or AGENTS.md and I'll pick it up!"
Like, isn't the whole point of those files to not have to constantly reference them??
"Coding" is solved in the same way that "writing English language" is solved by LLMs. Given ideas, AI can generate acceptable output. It's not writing the next "Ulysses," though, and it's definitely not coming up with authentically creative ideas.
But the days of needing to learn esoteric syntax in order to write code are probably numbered.
OK, but seriously... if Anthropic is on the "best" path, aside from somehow nuking all AI research labs, an IPO would be the most socially responsible thing that they could do. Right?
> The prevailing framing—in the essay and in the market—makes all economic disruption from AI look like a capability story: AI gets smarter, therefore jobs disappear, therefore the companies that serve those jobs lose revenue. The more accurate framing is: AI gets smarter, but institutional language games have their own logic, and the speed of disruption depends on whether AI can enter those games or must wait for organizations to rebuild them. I believe that the answer, for most enterprise software, is the latter—and rebuilding institutional games is a process measured in years and decades, not quarters.
The demise of saas has been overplayed imho. When companies buy software they are essentially buying something that solves a problem and the insurance that comes with that. Part of that means they get to pick up the phone and complain if something doesn't work and someone on the other end has to listen.
There is also a strong community aspect to software, someone asks for an enhancement others can benefit etc.
I just don't see a world where every corporation is building their own accounts, crm, hr software.
I do see one where they can much more quickly self-create within certain boundaries and this is where enterprises will differentiate in the near term.
I think it's a move from feature-centric SaaS to data-centric SaaS.
You can say that a SaaS consists of two components, the features and the data on which those features operate. If the cost of feature development goes to 0, and development speed goes to infinity, you can no longer compete on features alone. The Constraint shifts; it's no longer what features you can deliver, it's whether you have access to enough data about the business to deliver those features.
Instead of traditional, siloed, rigid web applications, I think the pattern for the AI era will be an "enterprise OS", some kind of Salesforce / ERP-like platform where all the data about a business is kept, and where applications like Slack or Jira exist as plug-ins consuming the database. Such a workflow makes it trivial to do a one-off task using conversational AI agents, or even to vibe-code a workflow-specific app that does one thing well, one thing only, and exactly how this particular business needs it done at this particular time.
> "enterprise OS", some kind of Salesforce / ERP-like platform where all the data about a business is kept
I read this, turn it to "person", and see Google/Android (maybe Microsoft/Windows/Office to a lesser degree) shooting off if they design their data APIs to be gen AI usable. Which they mostly already are.
If individuals can vibe code personal apps easily because their personal/relevant data is already in one place, that's going to be a major tailwind.
Sadly, I think Apple is too institutionally cathedral (over bazaar) to keep up with them.
> if they design their data APIs to be gen AI usable. Which they mostly already are.
Surprisingly (or not), an ArsTechnica article showed that Google's AI browser was really bad at working with their services. At least, for what ought to be an obvious vertical integration win:
We let Chrome’s Auto Browse agent surf the web for us—here’s what happened[0]
Right. You can't vibe code an iOS app because the agent can't step into that cathedral. What I'm curious about is will this result in Apple locking down that cathedral even more or opening it up a bit - for example by better supporting progressive web apps.
Apple is benefiting hugely from Openclaw because the Mac Mini's are selling like hot cakes. My hope would be that apple embraces that community, but given the history of the senior leadership, I'm afraid that they will not do so.
Probably not a feature-complete app, but they're not completely unable to code Swift apps. I wanted to contrast Claude vs Codex and had both build a basic weather app just to see if they could. It wasn't anything anyone would want or buy, but they were both able to do that much.
I've successfully spec-coded a functional iOS terminal app for proxying Claude Code (and family) from an owned system. It was easy - even the icon and slick splash screen.
An Apple Developer Account would be required to deploy it. A free account permits sideloading of a private app.
Apple has a different problem, too much of a focus on privacy.
Doing AI well (especially on a battery-constrained phone) requires cloud models. SOTA models require Nvidia GPUs (or maybe Trainium / TPUs), definitely not private cloud compute and Mac Minis with no interconnect. I don't think Apple can deliver that, and I don't think they're willing to open up their OS for competitors to do that either.
Yes, data is the new playing field, but if a specialised tool can do more with less data it'll still win market share. We can generalise to say that won't be the case in XYZ years due to generative AI but i'm not buying it yet.
Who said SaaS is dead?? The HN uber-brain? The people who thought MongoDB was God's gift to databases? Don't listen to think-pieces you find here, they're wrong by default. Normal people (and businesses) don't want to build and run software products, they want to pay someone else to do it for them.
Don't underestimate the power of LLMs to build targeted bespoke systems. I used to work on an internal QA team at a software company, and it quickly became the "internal web app" team after I built 2 web apps (to coordinate manual testing and handle the post-release fix approval process). I'd bet a lot of money that the team I was on is currently building a lot of new apps and features for internal use using Claude Opus or OpenAI Codex.
For companies that are willing to pay a few more developers, they can build some bespoke apps for internal use (if simple enough) to coordinate workflows.
Of course, highly complex, domain-specific software will never be dethroned. No one can build a Linux replacement with an LLM. Same for DaVinci Resolve, Apple Logic Pro, Pianoteq and ArcGIS. But glorified CRUD apps that handle basic workflows and integrations will likely be subject to losses on the low end, where a few devs and a Claude Code subscription can handle basic cases.
> I just don't see a world where every corporation is building their own accounts, crm, hr software.
I agree on that point. But I think the industry will still take a huge hit. As SaaS may not be killed by any random individuals, but big corps.
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We just moved from sharing skills about good practice for a few functions to skills about good architecture/design/marketing practices.
It's just a question of time before we get skills about "good features in a CRM". And there is a high chance, a LLM will generate them in a few minutes ^_^
We could already do them for a few software, like notepads and ticketing software.
IMO any fully virtualized business will become trivialized through global knowledge sharing.
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I don't think META/MICROSOFT/OPENAI will close their eyes on the "Amazon Basics" strategy. IMO they will (soon?) provide high scale replacements for simple and expected softwares.
Right now it would require them a lot of defocus. But soon it will be just a new product, an agent away.
>provide high scale replacements for simple and expected softwares
I like the "Amazon Basics" analogy.
Also consider that these enterprise platforms are both very expensive and very customizable. Consider SAP which is a huge proprietary mess - including the backing store. An enterprise that buys into SAP is also buying into spending $1M+ a year on consultants.
Open enterprise software will have at it's core open relational database schemas that can be run on the database engine of your choosing. The AI models will be very familiar with those schemas and with the presentation tiers, and will be building a bespoke business app - but not from scratch.
I think the enterprise software consultancies are going to be in trouble. New consultancies will soon emerge who will help move customers off of the legacy platforms.
There could be another model in the future, one where many more independent people might support self maintained software by non saas companies
e.g. If the supply of labor learning to build software increases and it becomes very close to what are now vocation training, then you can just hire a guy — like you would a consultant — who can quickly get spun up and make fixes. I would think one of the few things preventing this kind of socio economic set up are saas jobs that are siloed off by interview "walls" to most people from entering. Make it like a vocation, like plumbing or electrician, with lots of non saas companies supporting the market and suddenly it will be the death of saas.
The incentives for this future are closer than they were in 2022-23.
It won’t be the demise of general purpose SaaS like CRM, though it may be the rise of ridiculously full featured f/oss alternatives.
However, niche stuff like vertical-specific CRUD apps that used to be able to charge a heavy SaaS premium simply because they could develop CRUD apps and UI faster than their customers are toast.
> However, niche stuff like vertical-specific CRUD apps that used to be able to charge a heavy SaaS premium simply because they could develop CRUD apps and UI faster than their customers are toast.
You'd be surprised how many industries are just not that tech-savvy. Your average real estate company or accounting firm doesn't have the expertise to build even the simplest apps, and a keen employee vibe coding a CRUD app at a non-tech company is only 20% of the problem. Where are they hosting the CRUD app? How are they getting alerted when the CRUD app goes down, or when it starts spitting 500s? Who's handling database and OS upgrades for the server hosting the web app? These may sound like simple things to you and I, but to a company with zero expertise, the first time their database goes down and they (and ChatGPT) can't figure out why, they get spooked. If these companies wanted to avoid paying SaaS they'd be better off using Excel.
I started my career in consulting and it was filled with cases like this, even pre-AI, where a non-tech company built some kind of internal tool, it got too unwieldy because it was coded like shit by people with minimal development experience, and they ended up outsourcing hosting and maintenance because it was too difficult and they had no interest in building a software department.
One thing to consider is that pre-AI homegrown software is a house of cards, whereas post-AI vice coded software can be better than what most average engineer can craft.
They’re also getting quite good at fixing 500 errors at the speed of a prompt, which is faster than humans
That’s the big question on my mind. Several years ago we migrated from an in house Ruby on Rails solution to Salesforce. Will vibe coding bring us back to a custom solution? When?
I don't know if I agree with your line of thinking.
IME development speed is a very minor factor in the success of a vertical SaaS. Vertical niches exist because they are experts in something other than software, and understand it's worth paying for their problems to be solved. Typically, subscriptions of successful software businesses are priced based on outcome/value, not the cost of development.
I for one have found myself happily spending hundreds of dollars trying to build things I struggled to do in the past. And I am happy to keep things open source because I know the code is no longer the moat.
As an example, I started this almost 10 years ago:
Assuming this comes from lower barriers of entry to software engineering skills at scale with LLMs, this is still begs the question: Who will pay for the tokens? One thing is giving away your free time for passion, other one is giving away money.
Maybe we'll see a future were people crowdsource projects supporting them directly via donations for tokens/LLM queries.
I built a CapRover clone that’s actually free software for <$1k. I imagine it wouldn’t be much more to modify a fork of Mattermost to add in their pay-gated features like SSO and message expiry etc.
> people crowdsource projects supporting them directly via donations for tokens/LLM queries.
Is this perhaps happening today? Large open source projects where llm could deliver the code.. e.g. I want an home assistant to connect to something that perhaps isn't mainstream but used by a dozen users. Those dozen users fund the PR via token budget?
Opportunity costs: Would you rather pay 100 bucks for making more money or for your foss projects?
The same can be said of your time, but here we're talking about scale benefits due to LLMs (i.e. lots of SaaSs dying due to lots of "full featured f/oss projects").
it's not the end of software, there will be infinitely more of it
it's the end of 80-90% margins that the valley coasted on for the last 20 years. Salesforces of the world will not lose to an LLM, they will lose to thousands of tiny teams that outship them and beat them on cost
instead of 7 figure contracts you'll have customized tailored tools for enterprises, and on the other end you'll have a custom nearly free CRM for every persona
this also means that VCs will stop investing in it, unless it's a platform with network effects and heavy lock in
Alternative take, in light of upthread -- Salesforce, SAP, et al. are positioned to be the biggest beneficiaries of this.
Because their product is actually two things: (1) a UI/app & (2) a highly curated data model.
My imagined future... they just stop building (1), or invest much less in it, and focus on (2).
If they can build a compelling data foundation (ingest / processing / storage / exposing) + do much less work to still cover 80% of UI functionality + offload the remaining 20% of work onto customers, that looks defensible financially and strategically.
There's a ton of feature requests that are driven by a few customers. Aka the "You're using it wrong. We don't care, we want it to do X" cases
There are very few VP+'s out there that would take on strategic data integrity risk in exchange for anything, and as new SaaS code quality likely goes down (lets be honest) the imprimatur of a "known name" on the data side becomes more important.
Agreed, and here's a real example from a tiny startup: Clickup's web app is too damn slow and bloated with features and UI, so we created emacs modes to access and edit Clickup workspaces (lists, kanban boards, docs, etc) via the API. Just some limited parts we care about. I was initially skeptical that it would work well or at all, but wow, it really has significantly improved the usefulness of Clickup by removing barriers.
Sure, depending on the particular product, having control and direct local access to the data would be desirable or deal breaker. But for this Clickup integration that's not so important to us (we can duplicate where necessary), while still using Clickup lets us use all the other features we can get via the web app.
> unless it's a platform with network effects and heavy lock in
I'm always slightly amused when buzzwords are thrown around vaguely such as "network effect" and "lock in". Those are not entirely a matter of a better sales pitch or bandwagoning. They're about the actual product.
> they will lose to thousands of tiny teams that outship them and beat them on cost
They won't, but this is the actual reason. Nobody likes dealing with support or maintenance, and having to reach out to tiny teams is death by a million papercuts for the end user too. The established players such as Salesforce, ServiceNow, etc. have a mature product that justifies the 7-figure contract price, and there are always lower tiers of the same product for those who are that price sensitive.
i'm talking about ubers, airbnbs, amazons, googles and facebooks of the world, marketplace software that aggregates supply and demand
> They won't, but this is the actual reason. Nobody likes dealing with support or maintenance, and having to reach out to tiny teams is death by a million papercuts for the end user too.
you will have thousands of linear like products eating the slow moving jiras of the world. great small product driven teams, not slop thrown together by your mom
AI raises the ceiling much further than the floor and it raises the floor a ton. the best software, movies, etc will still be produced by experts in their field, they'll just be able to do way more for less.
the bottleneck at large orgs is communication already, this will get even worse when time to produce stuff goes way down. big cos will drown in slop and are probably better off starting from scratch
Sure, and this is exactly why people buy software and vibe-coding can't replace it. Still don't get it? Windows, Photoshop, Figma, whatever popular software are full of issues. But people have worked around these issues and posted their workarounds and experiences online. The cost to live with these issues are amortized among the huge number of users.
When one got an issue with their in-house vibe-coded solution, where can they look for help? Nowhere, except hoping it can be fixed by throwing more token at it.
Perhaps those companies might start using llm to sort these out, typically it's the long tail that suffers in software...smaller enhancements, quality of life features that user would really like but can live without.
Sure, same way that restaurants have an obligation to serve quality food in clean conditions, but it’s easy to find counter-examples.
I don’t think anyone is saying that SaaS is a magic bullet that guarantees big-free software with great support in every case… just that it aligns incentives between buyer and seller better than the “if I can trick you into writing a big check once, I’m outta here” one-time-purchase model.
Right on.. we already have open source alternative to all the major SaaS out there and companies still opt for the SaaS option instead to avoid the headache of self-hosting and all the other stuff. The extra resources that AI affords you will be directed to building more features for your customers.
The question is "open source" vs "proprietary". Open source will become the majority of SaaS. But the industry needs to find the right business model. I think the model will look, to the enterprise clients, largely the same as today. There will still be usage costs (both per user and storage) and support costs. But there will not be "license costs". And there will be much less lock-in.
So true - very often companies don't even look at free alternatives but go after a paid one right away. Now imagine writing software ))) What a mental idea
> Part of that means they get to pick up the phone and complain if something doesn't work and someone on the other end has to listen.
Yeah, so that part is actually not that fun? If I can have a setup with a reasonable shot at just fixing problems instead of having to go through random-saaa-support that is like really neat.
>I just don't see a world where every corporation is building their own accounts, crm, hr software.
I do see a world where every corporation would use agents-friendly platform to create their own accounts, crm, hr software. The insurance will come from the platforms vendor support.
I’m at $LARGE_ENTERPRISE_SAAS and I agree. There is a mass psychosis going on around what these LLM tools (which I use daily) are capable of *at scale*. The amount of business processes and tasks these software suites can, and must perform at near 100% correctness every time is massive, across an insane number of domains, accounting for an insane number of laws, countries, languages, browser configurations, business requests, legal teams. The list goes on, and while you can bootstrap a front end that appears to do 80% of a large dinosaur competitor like ours, the reality is it can’t, and the context windows to get there are in the orders of magnitude larger than they are today.
The weird part is that people at our company also fail to see this. “This vibe coder is going to recreate 20+ years of code, use cases, business processes and integrations for thousands of companies across hundreds of domains!” is uttered every day and just simply isn’t true.
It's certainly not true yet, but LLM abilities now vs two years ago leads really makes you think. It may not be easy to replicate all you do, but new entrants could easily just go after the highest margin parts of your business. Why try to tackle All the countries and browser configs when you can get 90% of the profitable ones, and just address that part of the market?
i.e. Apple does a ton of work to ensure I'm paying taxes and complying with laws in hundreds of places I'll probably never make a sale in. Sure, some high paying people might need all of that, but I'd be happy with just USA. I only utilize the other parts because it was a few clicks.
Most companies only need a subset of the features that these mega-platforms offer, as they operate within single industry, targeting specific customers many times in a single country with a simpler legal landscape.
I have no idea for sure, but odds are 80% of the revenue of these current saas providers is generated from 20% of the features they offer. Lightweight newcomers can just focus on that 20% and ignore the other 80%.
A 2 person startup cannot provide a dedicated developer for your account, a personal contact for each of their thousand customers, is at high risk of being acquired/changing their business model/founders abandoning it, etc.
For enterprise, long-term stability and personal contact matters more than price. A typical SaaS contract is 0.x% of yearly revenue of big corps and nobody wants to be the one person risking the business for such miniscule savings. Another often overlooked part: Employees are the biggest cost center, much larger than any contract. So retraining a single team of 10 employees can often be more expensive and more disruptive to the business than just sticking with a legacy provider and established processes.
I'm not sure this matters. Enterprise is always slow to move anyways, and frankly, not usually worth the trouble for early startups.
What happens instead is that the new cheaper competitor proves themselves in the 1-10 seat company range for a few years. Then 5 to 10 years later, when the enterprise is evaluating renewals again, they go "Why are you so much more expensive? Look "X-two-guys" over there only charge 5% as much as you for the same product!" to the current SaaS they buy from.
Will they all move? No. But enough will, eventually.
You'd be surprised how little price factors into the equation for decisions like this. Anyone that tried to acquire customers as a fresh start-up knows that trust means a lot to established companies.
Yup. Engineers can intuit quality up to a point from very weak signals. Those signals become illegible _really fast_ the further you move in competence from the core domain of the offering - and after that all you have as a decision maker are _market_ signals such as known brand.
This is my take as well. Everyone (correctly, in my opinion) assumes that customers won't bother to recreate a SaaS themselves with AI because it requires at least some skill, time, and knowledge.
But SaaS doesn't die because of all the customers creating one-off solutions themselves. It does the "desktop program" -> "mobile app" pricing transition.
It drops monumentally in price because now a very small (sub five) group can clone an experience and charge pennies on the dollar.
Why pay $15/month/user if some other reasonably stable company offers you $1/month/user?
If the other company is "equally stable" then pricing offers leverage sure.
But there are lot of situations were _any_ license costs in some given range are so trivial nobody actually cares wether it's $15 / month or $1 / month.
There are B2B customers who are ready to pay license premium for known brand vendor, even if they would use just a subset of the available features. Change is always a risk, internal efforts are better spent than counting beans, etc.
This is absolutely true, but also not that important.
Again - I'm not saying "All SaaS products are going to immediately go away". In the same way that all desktop purchases didn't immediately dry up in response to mobile apps.
But some customers are extremely price sensitive. And some customers who aren't price sensitive now, become price sensitive at some point.
Most new entrants to an existing market explicitly don't win by trying to engage the large enterprise customers. It's a shitshow of misaligned interests, checklist style purchasing decisions, unreasonable demands, custom solutions, etc...
They win by being a decent product at a decent price point for the 1 to 10 seat company range. The people who are both buying and using the software personally. With their own money, not a corporate card.
Eventually, the SaaS catering to enterprise has to actually explain their value to those users, and often it's basically zero: they're more expensive because they have all that cruft enterprises need, not because they're a better value for solo/small business.
So the legacy player starts to see serious churn. Retention becomes problematic. New user growth slows. Prices have to go up to maintain existing profits, which just drives more small folks away.
And then a decade later you have an overpriced enterprise only solution, which may absolutely still have a couple of large customers who won't switch, but who is otherwise essentially a legacy product on the road to death.
And then the enterprise customers start looking at why they spend so much compared to the other vendors for a legacy product, and they start bleeding away too.
This is a tempting (and not completely false) shortcut, but often you don’t compete for customer’s wallets.
For many companies, a lower price is often not the reason they switch.
They stay because of the time invested in the current solution, the integration in their pipelines etc.
They’re not going to build their own, it’ll just be one of the many capabilities of the agent platform they use. A 2024 SaaS is just a playbook for next-gen AI.
You don’t buy a spelling correction program because it got built into Word. And now, the OS…
> I just don't see a world where every corporation is building their own accounts, crm, hr software.
This is the world we live in. Majority of top level managements are now reevaluating each and every 3rd party tool they use and prospects of re-building that themselves. Don't forget that at those levels they are easily dealing with at least six figures per tool.
The tools are complex, clunky to use, complaints are often directed to the tools. We now the pain points, we know what the tools do, how hard would it be to instruct AIs to make better version addressing the deficiencies we face?
At some point some of them will realize the old truth that any business system is at least as complex as the business process it models. Those processes are indeed quite complex.
But you don't know what you don't know and extreme carefulness does not get you promoted to the top level management. So will indeed see attempts (typically unsuccessful) to rewrite common 3rd party tools left and right.
After trying to trade the cycles I gave up and stuck some key currencies on a hard wallet put it somewhere safe and told my wife. My kids will either thanks me or wonder what the heck I was thinking in the future. Worth it for pure asymmetric payoff scenario and just to have some skin in the game. All imho and not advice!
That's pretty cool. Wonder if it is deployed and updated religiously still. If they wanted to deploy an 'Agent' worker that source is goldmine for context.
https://ionanalytics.com/wp-content/uploads/2026/02/The_Wron...
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