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Will AI destroy B2B SaaS?

by Alex Yumashev · Updated Mar 7 2025

Everyone worries about AI taking developer jobs, but what if AI wipes out the entire off-the-shelf software industry?

TL;DR

  1. The "build vs. buy" equation has flipped. Businesses used to buy SaaS because it was cheaper than building their own. AI has changed that—building your own is now more affordable than ever.

  2. The discovery problem. AI recommendations default to well-established solutions. Think SEO is a long game? Try LLM SEO.

The "Why Buy?" Problem

Six months ago, we needed an AI-powered code review tool. We explored several options and ultimately "vibe-coded" our own app that lives in a GitHub action, takes a git log, sends it to Claude via the API, grabs the response and posts the results to our team's Slack. Done. The best part? AI wrote the entire thing faster than it would take to sign up for a SaaS.

How long until every company realizes they can do this?

Need a simple "CRUD" CRM, but with JIRA-style tasks? Done. Need a mobile time-tracking app for remote employees, but with GPS and a bar code reader? AI will spit out a React Native iOS build in minutes. Why pay for yet another SaaS when you can "vibe-code" something in a week?

And mark my words, LLM providers are one step away from actually hosting the code they generate. Who needs to spawn an AWS server if you can just ask OpenAI to run the code it just wrote?

- "Hey Siri! build me a Basecamp, but with green buttons, also register a domain, spawn a server and host it all there, charge this credit card when you're done"

- "Absolutely, that'd be $1.17 per hour"

The Discovery Problem

AI doesn’t just make it easier to build software—it makes it harder for new SaaS products to get discovered. When you ask AI for recommendations, it defaults to the biggest names.

And not just in SaaS, by the way, in open source too. Imagine launching a killer new JS framework today. AI coding assistants and tools like Cursor will just default to React anyway. And not even the latest version of it! In a recent tweet Adam Wathan, the creator of Tailwind, asked: "Has anyone migrated to Tailwind 4.0 yet?"

The most popular response was "Nah! we're still waiting for LLMs to learn it."

AI isn’t just "the next internet moment." It’s more like "the social network moment." Echo chambers get louder, big names get bigger, and smaller ones disappear into the noise.

What Can SaaS Companies Do?

1. Become an Industry Standard

Or at least a "go-to" product in a niche. If your app becomes something people mention on their CVs or job descriptions, you win. Examples: Slack. HubSpot. Salesforce etc. A salesperson moving to a new company simply expects Salesforce to be there. That kind of lock-in ensures survival.

2. Build Moats: Infrastructure & Vendor Lock-In

Simple CRUD apps will just die. The ones that survive will own infrastructure or at least some part of it. Instead of building another AI voice assistant, create one with built-in VoIP and provide landline numbers to customers.

Examples:

Which SaaS Will Die First?

Side-project-scale, "one simple tool" SaaS products that used to be easy wins—form builders, schedulers, basic dashboards, simple workflow apps—those days are over. Even bigger apps but in a well-researched field, like project management or (cough-cough) helpdesk software are in danger. If AI can generate it in an afternoon, no one is paying a subscription for it. Oh, and "no code" is toasted obviously.

The SaaS graveyard is about to get a lot more crowded. I give it 4 years.

Software consulting is making a comeback though. Someone has to clean up the vibe-coded chaos.