Last week, Marc Benioff addressed the growing “SaaSpocalypse” narrative head-on. His response? “If there is a SaaSpocalypse,” Marc said, “it might be eaten by the SaaSquatch because there are a lot of companies using a lot of SaaS because SaaS just got a lot better with agents as a service.”
It was the classic Benioff that I know. He’s a colorful, confident, and competitive guy. But he always backs up his talk with numbers. Just months after launching their new Agentforce IT service, they already have 180 customers.
His point? AI is like rocket fuel, or a super soldier serum. Inject AI into a SaaS company, and it becomes the SaaSquatch, just like how Steve Rogers became Captain America.
But is it really that simple?
Here’s the danger that lots of SaaS companies are in right now: They think they are doing the right thing. They’re building in “MCP interfaces.” They are rolling out new “AI-powered” services. By adding AI to our established SaaS workflows and products, the thinking goes, we’ll super-size ourselves, keep our moats, fend off the competition.
But if that’s all they do, instead of becoming SaaSquatch, they may be SaaSquashed.
Why? Because AI isn’t just a new technology. Like the Internet that gave birth to SaaS, AI is one of those shifts that changes all the rules.
In the early days at Salesforce, our friends from our previous software employers didn’t really get what we were doing. They thought we were just taking the old software model and putting it online. In fact, we were obsessed with how the Internet changed how people found, bought, and consumed software.
- Companies used to go to physical seminars to learn about software. Well, that didn’t make sense anymore.
- Companies used to spend all this effort to install and patch software. Well, that didn’t make sense anymore.
- Companies used to live with outdated software because the cost of upgrades was too high. Well, that didn’t make sense anymore.
The list goes on. And in rethinking through what it meant to be a software company, we had to invent entirely new concepts and terms. Multi-tenant systems. Release processes. Lead forms. SDRs. BDRs. Customer Success Managers. ACV/TCV. Trust sites.
A lot of folks in the industry saw the “No Software” logo as just good marketing. And it was! But it also spoke to the ethos we had of wanting to blow up “how things were done,” the exhilaration we felt of dismantling a lot of the nonsense that the software industry had created, and the creative energy of rebuilding the operating system of the software business itself.
And the software companies that just took what they had, and hosted it online? They didn’t really change. And today they are no longer with us.
That’s what it feels like with AI right now.
Unsurprisingly, some of the old guard is still standing their ground. But on this issue, I’m much more aligned with Sridhar Vembu, the co-founder of Zoho:
“Can Zoho survive the AI wave? It depends upon our ability to adapt. I always ask our employees to calmly contemplate our death. When we accept that possibility, we become more fearless and that is when we can calmly chart our course.”
Some SaaS companies will emerge stronger, leaner, smarter. Others will get SaaSquashed.
Calmly contemplate your death.
