General Partner @ Emergence || We bend the odds of success for B2B founders
Will AI kill SaaS? In a world where anyone can spin up an application with StackBlitz's Bolt.new in 30 minutes, the threat to software vendors (and the VCs funding them...) seems existential. Why pay for something you could code yourself? My take: AI won't kill software vendors (my completely unbiased opinion as a B2B software-focused VC 😅). While AI will undoubtedly be integral to the next generation of software, vendors will continue to play a crucial role. Vendors provide: 1️⃣ An Opinionated and Experienced Perspective When you buy software, you're buying a battle-tested perspective on solving a specific problem. Specialized vendors get countless reps on how to best address challenges and craft their products accordingly. Critically, they gather the most valuable form of proprietary data: closed feedback loops of actions and outcomes across a diverse customer base (e.g., Coaching Networks). This data should enable vendors to deliver AI-enabled insights that home grown solutions can't. 2️⃣ Future Proofing The fact that technology is changing so quickly means applications get stale very quickly—exponentially faster than in the past. It's easy to create a V1. Not so easy to maintain it. You need professional maintenance to keep pace with the rate of innovation. 3️⃣ A Throat to Choke You hire vendors because you need someone to call when things go sideways. For business-critical functions, buyers will always pay for peace of mind and clear accountability. As AI agents become more powerful, software directly drives business outcomes more than ever. This creates an opportunity for vendors to evolve toward outcome-based pricing models. While still early, vendors may need to experiment more aggressively with these approaches to keep buyers choosing "buy" over "build." So perhaps the better question isn't whether AI will kill SaaS, but rather: How must software vendors evolve to thrive in an AI-powered world?
Software+Labor will become one… most customers will only care about the outcome. Software as Service will turn into Service as Software for everyone
Been having the same debate with a few VCs and entrepreneurs and agree with you, Jake. The economics of B2B software will change but the needs and roles will remain. I think :)
It's one thing to build a startup, it's another thing to build a lasting and sustainable business. 🤷
This is essentially what I said in another comment a few moments ago. Current deep integration and the humans that come along with that structural integration will continue to be a value prop for "SaaS" (i.e. traditional non-AI first companies that dominate the B2B space currently). Whether or not the incumbents can, and perhaps more importantly are willing to, evolve to meet the AI-first environment is another question. For many this will involve cannibalism and/or substantially shifted strategy/product roadmap - a pill likely too difficult for some to swallow until it's too late. Some quick examples from the AI side of my capability set (no shame): • CRM (Salesforce, HubSpot) → AI sales agents automate customer interactions. • ERP (SAP, Oracle) → AI-driven decision-making reduces reliance on dashboards. • Collaboration (Asana, Monday.com, Slack) → AI assistants manage workflows automatically. Clearly a shift from seat-based to usage-based pricing will be needed. This inherently threatens the traditional SaaS model's predictability. However on the up-side, if ROI can be proven, the ability to charge at higher margins through a value-based pricing model may be accessible.
Alert AI is end to end GenAI Application security platform, AI agents for Security Operations and Workflows, and end-to-end, interoperable GenAI security platform to secure GenAI applications, AI & data privacy controls.Jake Saper.Great Post!👏👏
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1wAgencies will kill SaaS vendors, or SaaS will become Agencies.