SaaS Isn't Dead: Why AI Won't Kill Good Software Businesses

TL;DR SaaS isn't dying. AI just exposed which companies deserve to survive. Fair pricing, kept promises, and earned trust still win. The cost to build software approaches zero, but infrastructure, reliability, and time don't. Trust becomes the moat.

The War

There's a war happening right now. Two camps. One battle.

Camp One: "SaaS is dead." AI writes code. Anyone can vibe-code their own tools. Why pay $50/month for something you can prompt into existence? The entire SaaS model is a dinosaur waiting to die.

Camp Two: "SaaS survives." Building is one thing. Running is another. People don't want to maintain infrastructure. They want solutions. SaaS isn't going anywhere.

Both camps have valid points. Both miss the full picture.

I'm somewhere in between. Some SaaS will absolutely die. The overpriced ones. The ones that broke promises. The ones that treated customers as ATMs instead of partners. Those deserve extinction.

But the good ones? The ones with fair pricing, kept promises, and genuine customer value? They're going to thrive.

The question isn't if SaaS survives. It's which SaaS survives and why.

The Real Economics

Yes, the cost to build software is approaching zero. AI writes code. Anyone can spin up an MVP in a weekend. The barrier to creating software has collapsed. But building isn't the hard part. Running is, GTM (Go To Market) is. Infrastructure costs money. Reliability requires expertise. Maintenance demands time. Security needs constant vigilance.

Can you vibe-code a CRM? Sure. Can you keep it running at 99.9% uptime while handling edge cases, security patches, data migrations, and scale? That's a different question.

People Want Leverage

Here's what the "SaaS is dead" crowd misses: people want leverage. The entire world runs on leverage. You don't grow your own food. You don't build your own car. You don't generate your own electricity. You pay others to handle complexity so you can focus on what matters.

SaaS is leverage. Someone else handles the infrastructure, the updates, the security, the uptime. You get the capability without the operational burden. This desire for leverage doesn't disappear because AI exists. If anything, it intensifies. When everyone can build, the advantage shifts to those who can sustain.

When Customers Stay

Loyal customers don't leave for alternatives when:

• The price is right. Not cheap. Right. Value delivered exceeds cost paid. Simple math.

• Promises are kept. The software does what it claims. Uptime matches SLAs. Features ship when promised. Support responds when needed.

• Trust is earned. The company doesn't play games. No dark patterns. No surprise pricing. No holding data hostage.

When these conditions hold, customers don't vibe-code replacements. The switching cost isn't just technical, it's trust. Building trust takes years. Maintaining it requires consistency.

Who Dies

Not all SaaS survives. And that's good.

The companies that will perish:

• Monopoly abusers. Those who raised prices 10x because they could. Who locked customers in with proprietary formats. Who treated users as extraction targets.

• Deaf builders. Those who ignored feedback for years. Who built features for enterprise contracts while neglecting core users. Who optimized for metrics over value.

• Trust violators. Those who sold data. Who buried price increases. Who made cancellation impossible.

AI doesn't kill these companies. It just makes alternatives finally viable. When building gets cheap, the moat of "it's too hard to switch" evaporates.

Good riddance.

Who Survives

The survivors will share common traits:

• Fast iteration. They'll use AI as a partner, shipping improvements weekly instead of quarterly. Customer feedback loops will compress from months to days.

• Lean operations. AI will handle more, teams will stay small, costs will stay low. This enables fair pricing without sacrificing margins.

• Relentless focus on trust. When anyone can build, trust becomes the differentiator. Reliability. Transparency. Consistency. The boring virtues that compound over time.

• Value alignment with users. Success for the company equals success for customers. No adversarial incentives. No growth hacks that erode goodwill.

The New Moat

In the pre-AI world, moats were technical. Complex systems. Network effects. Data advantages. Better algorithms. In the AI gold rush, everyone's focusing on faster models. Smarter agents. In the AI matured world, moats are human. Trust. Reliability. Reputation. Brand ethics. When cost to build approaches zero, cost of trust approaches infinity.

Anyone can spin up a competitor to your SaaS in a weekend. But can they convince your customers to hand over sensitive data? Can they prove they'll exist in five years? Can they demonstrate the operational discipline to never lose a byte? Technology can be replicated. The trust you earn with your customers cannot be copied. That's the asset worth investing in.

In an era of automation, taking exceptional care of your customers is paramount. Building unwavering brand ethics is your only true moat. Not your code. Not your features. Your relationship with the people who use your product. Trust is earned through time. There are no shortcuts. AI doesn't change that.

The Opportunity

For builders, this is actually exciting. If you run a SaaS that delivers genuine value at fair prices, your position strengthens. The noise of inferior competitors fades. Customers who stay become more loyal, because they've actively chosen you over increasingly easy alternatives.

If you're building something new, the bar is clear: earn trust faster than anyone can copy features.

Ship reliable software. Price it fairly. Keep your promises. Treat customers as partners, not targets. The SaaS companies that understand this won't just survive the AI era. They'll thrive in it.

The Bottom Line

SaaS isn't dead. Extractive software businesses are.

AI accelerates the reckoning that was always coming. Companies that abused their position get disrupted. Companies that earned their position get reinforced.

The cost to build software goes to zero. The value of trust goes to infinity.

Seems like a fair trade.

Thoughts? Hit me up at [email protected]