Source: Fortune.com
Summary
Fortune 500 companies are unlikely to create their own bespoke software, and AI agents will likely use existing SaaS software, rather than replacing it. SaaS companies are adjusting their business models to address the threat of AI agents, and the future of the industry is uncertain, with winners and losers emerging.
Our Reading
The numbers tell one story.
The SaaS apocalypse is not now. Despite the recent market fluctuations, the demand for SaaS companies’ traditional core product offerings is likely to remain. The threat from AI agents is real, but SaaS companies are pivoting their business models to address it. The future of the industry is uncertain, with winners and losers emerging.
Salesforce, ServiceNow, and Microsoft are all adapting to the changing landscape by introducing new pricing models and AI agent offerings. The foundation model companies, such as Anthropic and OpenAI, are also a threat, but not an existential one. They are building AI agents that will use existing SaaS software, rather than replacing it.
As the SaaS industry evolves, investors need to be prepared for ambiguity. The fates of different companies within the category will diverge, and it’s still too early to call the winners and losers.
