zlacker

Software will be easy to create, which will kill moats and margins on existing products. The game is up for pure saas. Smart money started pricing this in one year ago

>>llmsla+(OP)
For a lot of SaaS firms, a big part of their value is the domain knowledge and best practices encoded in the software.

Current AIs often do a bad job of that. Sure, they know a lot of it. But they also get a lot of it wrong, and can’t tell the difference between genuinely good advice, and advice that sounds good but is practically worthless or even harmful.

(Of course I’m biased since I work for a SaaS firm. But I’m talking about them in general, not just my current employer.)

>>llmsla+(OP)
Was the hard part ever really the software, though? It's the Service part of SaaS that seems to provide the moat. Lock-in, habits, workflows, integrations, and trust. And don't discount the appeal of making some part of your operations "someone else's problem." Could you hire engineers or use an LLM to make your own Google Docs? Probably, yeah, but would that be worth the headache of being responsible for a bespoke internal document system?

>>llmsla+(OP)
Can't wait for every hospital to create their own patient record system, every accounting office to create their own accounting software, every car service to create their own timebooking solution, etc.

>>idle_z+d1
the problem is an AI can figure out habits and workflows pretty seamlessly. lock-in is artificial and loses power when it's really easy to make a competing app for large swaths of web apps.

integration is likely the most valuable part of the puzzle, but it's also prone to disruption

I think all that's left are like <50 apps each with their own very bespoke and "power user"-ready interface

>>Hamuko+p1
> Can't wait for every hospital to create their own patient record system

Having worked in healthcare, this is the current state (per provider, not physical building).

>>Hamuko+p1
We go from left-pad to everything vibe coded. No one vets deps, no one vets vibes. Zero common sense.

>>idle_z+d1
yes, if it takes one month to build something that took 9 months previously, it completely changes your go to market strategy

>>skissa+31
ai will know the domain knowledge

>>idle_z+d1
> Could you hire engineers or use an LLM to make your own Google Docs

Or you can just ask your LLM to install https://github.com/CollaboraOnline/online

Between open source, LLMs, and SaaS vendors getting greedy and privacy invasive, the total pain minimization calc might shift for some orgs.

>>idle_z+d1
You might think you can, for a while. Been there, done that. But you probably can not do so sustainably in most cases. Even if you could, would you really be better off building vs. buying? Outsourcing development, operations, and maintenance is almost always the better choice, letting you focus on the things you do uniquely, differentiably, or meaningfully better.

"We have this awesome internal version of Docs that we're responsible for fixing, upgrading, and doing support for" is not the flex "AI can code anything!" aficionados think it is. Especially when you also have similar internal versions of Sheets, Jira, Slack, GitHub, Linux, Postgres, and 100 other tools.

>>idle_z+d1
The article is about SAP, Salesforce, etc.

Making your own Google Docs is stupid unless your company's core business is document management.

OTOH Replacing SAP with a bespoke system will make a lot of sense for many companies.

SAP is already the worst of both worlds. It'll have been highly customized for your flow so you've got all of the headaches of bespoke software and all of the headaches of SaaS. And unlike Google Docs, it'll be highly integral to your core business.

>>senko+44
Even then, I would expect most orgs would want to contract out to a company that manages an instance of that open source software. That management company could undercut bigger players because they don't need as many engineers working on features. I don't see where the LLM comes in and shifts the calculus here.

>>llmsla+(OP)
What would be some examples of some current software products for which you expect the game is up?

Are there any software products that you think will survive?

>>bryanl+o6
Companies pay millions and millions to get away from bespoke software, but not simply because of the costs. Companies want to do their core business, they don't want to also be a software enterprise, and assume all the risks that entails. Even if AI makes creating software 10 times less expensive, that doesn't really change.

>>cedill+29
SAP is bespoke software.

>>bryanl+o6
what do you mean SAP? like the ERP system?

I would absolutely NEVER steal or rewrite that. So much finanical stuff is baked into the business logic that impacts finance, regulations, hr, etc.

No do not roll your own ERP core.

Roll everything else

>>llmsla+93
I'm not sure how realistic it is to expect AIs to get detailed hands-on domain knowledge. A lot of this stuff humans learn by doing and by experience. AI models don't learn anything by doing and experience. A model vendor can't possibly encode all that experience into their training data, and even if they try, the problem is a lot of it will be vertical-specific, country/region-specific, and it is forever changing. SaaS firms have professional services and sales consulting teams who are constantly talking to customers about their actual business problems, and they feed that accumulated wisdom back to product management and data science, who in turn help engineering encode it into the product.

From what I've personally seen in SaaS AI agent development – if you try to build an AI agent to give customers advice in a particular business domain, you need to do a huge amount of work validating the answer quality with actual domain experts, and adjusting the prompts / RAG documents / tool design / etc to make sure it is giving genuinely useful advice. It is really easy to build a system which generates output which sounds superficially good, but an actual domain expert will consider wrong or worthless.

>>bryanl+o6
you are aware of the long history of organizations being absolutely screwed by bad erp implementations right? nike's 2001 issue, the horrific birmingham oracle implementation, avon, etc.

>>louier+7u
Those are examples of very good reasons to ditch i2, Oracle, SAP, et cetera.

>>llmsla+93
not if we don't tell it.

>>llmsla+(OP)
I totally agree with you and I think it's weird how people are downvoting you.

Software is much easier to create. It used to take 100 people to create a competitor SaaS product. Now it might take 3 people.

Traditional SaaS companies that don't have a data moat is in trouble.

Physical companies will dominate more than SaaS companies in the future. By physical, I mean energy and chips companies.