Is Artifical Intelligence Really Killing SaaS – Or Saving It? : Tom M
by: Tom M
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**Summary of the Content:** Software as a Service (SaaS) has been essential to Salesforce since its inception in 1999, providing businesses with an easily updated database for administrative tasks. Recently, discussions have arisen about the future of SaaS, particularly with advancements in artificial intelligence (AI) that could render traditional business applications obsolete. Microsoft CEO Satya Nadella hinted that the era of SaaS may be ending, suggesting that AI could take over the business logic currently managed by SaaS applications. This sentiment was echoed by Klarna's CEO, who announced plans to replace their SaaS partnerships with AI solutions. The text describes the frustrations sales professionals express regarding the tediousness of updating databases (referred to as CRUD - Create, Read, Update, Delete). A sales professional shared their experience of automating their workflow due to these frustrations, highlighting how AI could revolutionize this process by automatically managing updates across various platforms. While some believe AI will replace SaaS, others argue it will augment existing systems, making them more efficient rather than eliminating them entirely. Salesforce’s commitment to integrating AI into its processes suggests that SaaS will evolve rather than disappear. **Key Details:** - SaaS has been crucial for Salesforce since 1999. - AI advancements may threaten the traditional SaaS model. - Nadella's comments suggest a shift from SaaS to AI-driven solutions. - Companies like Klarna are moving away from traditional SaaS partnerships. - Sales professionals often find updating databases tedious. - AI may automate these updates, improving efficiency. - There’s a debate on whether AI will replace or enhance SaaS. **Additional Context:** The tech industry is experiencing rapid changes, and companies must adapt to stay relevant. Salesforce is investing in AI technologies to remain competitive, similar to how farming machines enhanced agriculture without completely replacing it. The future may see a blend of traditional SaaS and AI capabilities. **Hashtags for SEO:** #SaaS #ArtificialIntelligence #Salesforce #TechTrends #BusinessApplications #DigitalTransformation #AI #CloudComputing #AgenticAI #FutureOfWork
Software as a service (SaaS) has been the backbone of Salesforce since its founding in 1999, offering companies an easily updated database to simplify their administrative tasks.
But now, 26 years later, SaaS isn’t quite so revolutionary anymore. Artificial intelligence solutions seem poised to make a lot of these business applications redundant – at least, that’s according to some big names in the tech world. So, is SaaS really dying?
Did Satya Nadella Say SaaS Is Dead?
Microsoft CEO Satya Nadella recently spoke about the future of software as a service (SaaS) amid new innovations in agentic AI.
Though Satya did not use the words “SaaS is dead”, a few people in the ecosystem have interpreted his words that way. Effectively, he says that the age of SaaS as we know it is ending, with artificial intelligence stepping in to fill the gaps.
Satya told Bill Gurley of the Bg2 podcast that SaaS/business applications could “collapse” in the agent era. He added:
“The business logic is all going to these agents and these agents are going to be multi-repo CRUD. They’re not going to discriminate between what the back end is, they’re going to update multiple databases and all the logic will be in the AI tier.
“Once the AI tier becomes the place where all the logic is, then people will start replacing the back ends.”
This was not the only recent indication from big tech that SaaS might be on the way out.
Salesforce Ben reported in September 2024 that Klarna CEO, Sebastian Siemiatkowski, told investors that his company would be terminating two of its largest SaaS partnerships, Salesforce and Workday, as part of a generative AI overhaul.
Klarna believed that it could phase out both providers and replace them with equivalent systems through the power of artificial intelligence.
CRUD Databases and Sales: “I Despised Filling Out That Form”
There has been talk in the Salesforce ecosystem about the supposed death of the system of record databases – including Salesforce – for some time.
The cloud giant has become an industry giant by giving sales users an easy-to-update database. This is what Satya called “CRUD” – an acronym describing how users can interact with the database: Create, Read, Update, Delete.
Sales users are often annoyed by constantly having to update these databases when, some might argue, their time would be better spent trying to get more sales.
This frustration was summarized well by Dominick DeFazio, a recent Agentforce NYC Hackathon winner who spoke to Salesforce Ben in November 2024 following his victory.
Dominick described working in sales at a startup after he finished college: “I had been so frustrated with their setup in Salesforce. They were on Classic and it was taking me three minutes to log a case. They were doing cases after every call for some reason. I literally despised having to fill out that case form.”
He downloaded a program that records mouse clicks and used a macro to click through all his tabs to fill out required fields, effectively automating the most tedious and repetitive part of his job.
Now, with AI, the future may look very different. Sales users could be interacting with an agent that updates different types of databases in the back end, scanning our Google Drives, emails, calls, Google Meets, etc, and then simply updating everything that needs to be updated in the system automatically.
This might not happen straight away, but we might view agentic AI in 2025 the same way cloud solutions were seen in 1999; a simpler, more time-friendly way of dealing with admin work.
Will It Not Just Augment SaaS (and Everything Else)?
There is often talk of artificial intelligence destroying, replacing, or generally upending one thing or another, especially in the tech sector.
But a consistent argument used by AI proponents is that the new technology will not wipe the slate clean but will simply augment the existing field.
A good example of this is the rise of farming machines like tractors, which have not killed off the agricultural sector but have “enhanced” it.
Avanthika Ramesh, Director of Product at Salesforce AI, spoke to us about what the future might hold for Agentforce – and whether SaaS is dying.
She said that she does not think that SaaS is dead, but we are going to see an agentic layer over traditional SaaS processes which automates more tasks.
Avanthika pointed out that we are already seeing cases being updated and closed automatically in a proactive and automated manner with no manual entry required.
She told us: “We’re seeing some of those automations. Beyond that, we’re thinking more about ambient agents or triggered agents – where agents are monitoring what’s happening in the background.
“Based on certain record updates or processes or information, the agent’s able to fulfill a whole workflow without having the human waste time doing that because it’s very repetitive and manual. We’re already seeing a lot of that and I would say SaaS is not dead.”
Speaking about Satya’s comments on the Bg2 podcast, developer relations leader at Westview 1, Peter Chittum, told Salesforce Ben: “Everything right now is conjecture.
“The two guys (podcast hosts) and Nadella reflected that never in their experience has there been a technology inflection where so many people were so aware of it this early, and I do think it’s like that.
“We all have seen what an LLM can generate and the quality that we can aspire to get out of one – but we’re not there yet, and nobody’s monetized it. So if you can’t make money with it, how much money are we going to dump into this before we find something that works?”
Founder and CEO of Groundwork Apps, Paul Battisson, said that for the foreseeable future, SaaS is likely to disappear as output modes adapt to the changes in AI, and organizations – even those pushing AI solutions – look at how to adjust their revenue lines.
He said: “The current way in which users are interacting with generative AI is through text-based chat. As good as this is, it is not always accessible and can slow down how rapidly people can get the information they want. For those with dyslexia or who are using the chat in a second language, this is a real barrier, and in a time-restricted situation such as a call center, a visual overview is much better.
“I can foresee a new wave of AI agents focusing on giving output as structured data that can then be utilized for visuals such as charts and graphs.
“Equally, Microsoft – the company run by Satya Nadella who claimed SaaS was dead – has 23% of its revenue from SaaS subscriptions for Office 365.
“Is Microsoft really saying that it is going to disappear? Marketing is a huge part of this, and to me, the ‘SaaS is dead’ quote is exactly that.”
Final Thoughts
To stay successful in the tech industry, you need to develop a keen awareness of just how impermanent the status quo can be. The sector is prone to disruption, and resting on one’s laurels is simply not an option if you’re to stay competitive – no matter how big you are currently.
Salesforce CEO Marc Benioff seems keenly aware of this, and the cloud giant is going all-in on Agentforce, as “digital labor” becomes the next “big thing” to revolutionize the workplace.
The road is still foggy in terms of what that means for traditional SaaS applications. At the moment, it doesn’t appear that Microsoft Word, Spotify, or Zoom are going anywhere. But if your job involves tediously updating a CRUD database after every sales call, you may find yourself with more time in the day for your primary function – and sooner than you might think.
The post Is Artifical Intelligence Really Killing SaaS – Or Saving It? appeared first on Salesforce Ben.
February 12, 2025 at 02:44PM
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