“SaaS is dead” headlines vs real life
SaaS is dead. AI agents can replace your entire stack. Why buy software when you can vibe-code it by Friday?
If you’ve been on LinkedIn this past year, you know the headlines.
I was speaking with an executive at a Pre-IPO SaaS company recently. Not a legacy business, not a traditional institution. A new-age software company with a sophisticated workforce sitting in Bangalore. He mentioned, almost in passing, that internal ChatGPT usage had grown from 17% to 26% over the past year. He was pleased with the progress.
That number stayed with me. Because if If AI has “replaced SaaS,” why isn’t usage anywhere close to 100% for a general-purpose tool anyone can use?
Build vs buy sounds easy, until you meet the 2014 ERP
Here is what the “SaaSPocalypse” crowd consistently misses. CXOs are being pushed to build rather than buy, because vibe coding sounds cheaper and more controllable. But your AI agent still needs to talk to the ERP your team implemented in 2014, with three rounds of customisation that nobody documented. It still needs to clear data through compliance workflows that your BFSI client won’t move on without regulatory sign-off. API integration in financial services isn’t a footnote, it’s often the whole problem.
And BFSI is not a laggard here. They’re among the earliest adopters for SaaS businesses being built in India. But early in intent doesn’t mean easy in execution, when you’re dealing with legacy architecture, data residency requirements, and procurement cycles that don’t care how impressive your demo was.
Here is the deeper problem. AI is moving fast enough that end users need continuous room to experiment, but most enterprises still run top-down buying cycles where executives decide which tools get deployed. A tool that looked impressive two months ago can be genuinely stale by the time it clears procurement. The organisations that are pulling ahead aren’t waiting for that process. They’re creating space for their teams to experiment before the window closes.
Yes, AI will transform jobs. No, it won’t erase SaaS overnight
Is the gap between headlines and enterprise reality closing? Yes. Will people need to retrain or get left behind? Yes. Will organisations downsize? Probably.
SaaS was always a delivery mechanism, not a product category. The pricing will evolve, services will get productised, and businesses will get more efficient. That’s already happening.
As investors, we’re not betting against AI. We’re betting on the founders who understand that the hard part was never the technology. It was always getting it to actually work inside the messy, complicated reality of how enterprises operate. Integrations, Security clearances, Change management, Procurement reality. That problem hasn’t been vibe coded away.
But the next time someone tells you SaaS is dead, ask them what percentage of their own team is using ChatGPT daily. The answer will probably surprise you.
