The Great SaaS Delusion

SaaS isn’t being disrupted; it’s being exposed as the elaborate Procrustean bed it always was – forcing humans to adapt to software rather than the reverse.

The $1.3 trillion SaaS empire stands revealed as a colossus with clay feet, built on the unsustainable premise that humans would forever click through artificial workflows designed by programmers who never understood their problems to begin with.

Phase 1 (Now): AI enters as “co-pilot,” and SaaS executives celebrate what they mistake for enhancement. Like bank executives before 2008, they see the additional complexity as a feature rather than a warning sign.

Phase 2 (12-18 months): Agents shift from assistants to operators. SaaS companies suddenly discover they’ve been selling interfaces, not outcomes. The expertise they thought they’d monopolized was never theirs to begin with.

Phase 3 (2-3 years): The final act – software invisibility. The “S” in SaaS vanishes when interfaces designed for humans become as relevant as steam engines in the age of electricity.

The most telling fragility: SaaS metrics will show strong DAUs while the economic foundation crumbles beneath them. The corporate equivalent of the cartoon character who runs off a cliff but hasn’t yet looked down.

This isn’t mere disruption – it’s the complete inversion of the software power dynamic. Companies once forced to choose between million-dollar custom development or ill-fitting off-the-shelf solutions can now manifest bespoke systems with the conversational ease of describing their actual workflows.

The sacred “moats” of SaaS – specialized knowledge, economies of scale, network effects – are revealed as temporary conditions rather than permanent advantages. Knowledge is democratized, scale loses relevance, and networks become portable.

The winners won’t be those who add “AI features” (the equivalent of taxi companies creating apps to compete with Uber), but those who recognize that interface-based software was merely a transitional technology – a bridge between the command line and truly adaptive systems.

The fundamental error in current SaaS thinking: believing this is about competition between products when it’s actually about the dissolution of the product category itself.

Watch for the ultimate irony: Microsoft, Adobe and Atlassian will make perfectly rational decisions to protect their existing businesses, and these rational decisions will accelerate their decline. A reminder that optimization and survival are different objectives, often at odds.

The epitaph for today’s SaaS giants will read: “They were excellent at solving yesterday’s problems, right up until the moment those problems became irrelevant.”