SaaS in, SaaS out: Here's what's driving the SaaSpocalypse | TechCrunch

"The barriers to entry for creating software are so low now thanks to coding agents, that the build versus buy decision is shifting toward build in so many cases. SaaS has long been regarded as one of the most attractive business models due to its highly predictable recurring revenue, immense scalability, and 70-90% gross margins."

"When one, or a handful, of AI agents can do that work - when employees simply ask their AI of choice to pull the data from the system - that per-seat model starts to break down. The rapid pace of AI development also means that new tools, like Claude Code or OpenAI's Codex, can replicate not just the core functions of SaaS products but also the add-on tools a SaaS vendor would sell to grow revenue from existing customers."

"Customers now have the ultimate contract negotiation tool in their pockets: If they don't like a SaaS vendor's prices, they can, more easily than ever before, build their own alternative. Even if they do not take the build route, this creates downward pressure on contracts that SaaS vendors can secure during renewals."

AI coding agents like Claude Code are fundamentally disrupting the SaaS business model. Companies can now build custom software solutions more easily and cheaply than purchasing traditional SaaS products, shifting the build versus buy decision toward building. This threatens SaaS vendors' core revenue model, which relies on per-seat pricing where companies pay based on employee usage. AI agents can perform work previously requiring multiple employees, making per-seat pricing obsolete. Additionally, AI tools can replicate both core SaaS functions and premium add-on features that vendors use to increase revenue. Customers now possess powerful negotiation leverage, as they can threaten to build alternatives if pricing seems unfavorable, creating downward pressure on SaaS contract renewals and threatening the industry's historically high margins.

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