Well, it depends on who you ask. The rapid advancement of AI tools — exemplified by Anthropic’s industry-specific Cowork plugins and OpenAI’s launch of its own enterprise agent Frontier — has caused some turmoil in the software-as-a-service sector, sparking fears that AI could render many software products obsolete. Some have gone as far as to predict a “SaaSpocalypse.”
These fears were heightened by a recent sell-off of software stocks, as worries swirled that software products would become obsolete. But, as with everything, when it comes to what I like to call the “AI scaries,” AI’s impact on SaaS is more nuanced.
Impact on earnings
Oracle and Microsoft reported strong earnings in February. On an earnings call at the end of February, Salesforce CEO Marc Benioff tried to address the elephant in the room by basically calling on investors to chill, saying, “It isn’t our first [SaaSpocalypse].”
Benioff added, “If there is a SaaSpocalypse, it may be eaten by the Sasquatch because there are a lot of companies using a lot of SaaS because it just got better with agents. Rather than eliminating the need for software, AI is reshaping the industry by integrating into existing platforms and shifting pricing models from per-user fees to outcome-based charges.”
There was a debate about this on Reddit.
Is a “SaaSpocalypse” coming? Send us your thoughts.
If you like these insights on AI, sign up for the AI Impact SmartBrief, our twice-a-week practical newsletter on AI.