Quick Read November 30, 2025 · 1 min read
The End of SaaS?
AI native startups still have an uphill battle against SaaS incuments
Enterprise AI Thinking Out Loud
SaaS incumbants still have advantages selling to larger enterprises:
(1) Deep integrations: siloed data systems, access control, etc will be difficult to successfully manage in-house. There’s likely still a long-tail of legacy tools that will be hard to displace
(2) Trust. Buyers are more likely to purchase from more established vendors. It’s easier to get funding for SalesForce than a new AI native vendor or in-house buildout. Early adopters will try new shiny tools, but this is a small subset of buyers
(3) ROI - outside vendors with comparative advantage can build and maintain AI systems at lower costs than in-house teams
Where in-house builds replace external vendors:
- Strong data management, few dats siloes, and fewer legacy tools
- Low regulation; so less incentive to offload risk and maintenance/reporting to outside entity
- Firms with innovation focused cultures; leaders have long-term incentivizes to try new vendors even at high risk of failure (vs. short term focus on AI projects because of hype)