AI agents are starting to eat SaaS
a day ago
- AI agents are starting to replace SaaS tools, particularly simpler ones, as the build vs. buy calculus shifts.
- Demand for simpler SaaS is evaporating; engineers can quickly build internal tools with agents.
- Companies are questioning renewal quotes from enterprise SaaS and considering building solutions themselves.
- Custom-built apps reduce complexity, eliminate unused features, and give full control over the roadmap.
- Maintenance concerns are mitigated: agents lower maintenance costs, and SaaS itself has maintenance pitfalls.
- SaaS valuations rely on customer growth and net revenue retention (NRR), which may decline as customers migrate away.
- Moat remains for high-uptime systems, high-volume data, network effects, proprietary data, and regulated industries.
- Back-office CRUD tools and simple dashboards are most at risk of being replaced by agents.
- The market will split between tech-savvy companies that can build and those that cannot, widening competitive advantages.