When AI Builds the Software: How the SaaS Model Is Being Remade from the Ground Up
The SaaS model has been one of the most reliable structures in modern business: predictable recurring revenue, high margins, and the gravitational pull of switching costs keeping customers in place. That model is now under serious pressure.
The rise of capable AI coding tools means the long-settled “build versus buy” equation is tilting back towards build, and the implications for how organisations procure, manage, and price software are significant.
The Per-Seat Model Is Losing Its Logic
SaaS vendors have long priced their products by headcount; the number of employees using the software. But as AI agents become capable of performing work that previously required a human licence-holder, that pricing structure starts to break down. Why pay per seat when a single agent can do the work of many?
Businesses are already noticing. When Klarna replaced a major CRM platform with its own AI-built system, it signalled something beyond a vendor switch, it showed that building bespoke software is no longer the exclusive preserve of large tech companies. That realisation has become a powerful negotiating position for any organisation heading into a SaaS renewal.
A Structural Shift, Not Just Market Noise
Public markets have responded sharply, with significant value wiped from software stocks following successive AI product launches. Some analysts have called this a market overreaction. Others point to something more fundamental: for perhaps the first time, the long-term value of software itself is being questioned.
AI-native startups are scaling faster than any previous generation of software companies, unburdened by legacy architecture and able to replicate core SaaS functionality at a fraction of the traditional development cost. The SaaS incumbents that spent years building their platforms now face competitors who can rebuild those features in months. New pricing models, consumption-based or outcome-based, are emerging as alternatives to the per-seat standard, though none has yet established itself as the successor.
What This Means for Technology Decision-Makers
For organisations reliant on SaaS platforms, the disruption creates both risk and opportunity. Vendor contracts that once felt fixed are now renegotiable. The threat of building a replacement, even if never acted upon, has become a genuine source of leverage.
At the same time, enterprises still need software that meets compliance requirements, supports audits, and provides operational durability. The transition will not be instant, and not every SaaS relationship is worth disrupting. The organisations best placed to navigate this moment are those with a clear view of their technology stack, a realistic assessment of where AI can substitute or augment, and the capability to act on both.
Our View
The SaaSpocalypse is a useful provocation, even if the reality is more gradual. What is genuinely changing is the nature of leverage in software relationships – and organisations that understand this shift will be better positioned to manage their technology costs, reduce dependency risk, and invest in platforms that will retain value.
The businesses that will benefit most are not those that abandon SaaS wholesale, but those that approach their digital estate with greater strategic discipline. Know what you own, know what it costs, know what AI can now do instead, and build accordingly.
Our Solutions
CF Digital helps organisations turn complex technology challenges into growth opportunities. By combining deep technical expertise with modern digital capabilities, we deliver solutions that are practical, scalable, and built for impact.
Our services span artificial intelligence, cloud strategy, data science and analytics, cybersecurity, SaaS and fintech platforms, and talent solutions – giving organisations the breadth of capability to assess, build, or migrate their technology estate in response to a fast-moving landscape.
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