Software is a Service

I’ve been thinking a lot about software and its future. The last few months AI got really good. So good that, as a human, you no longer have to be at the wheel ‘writing’ software.”

People are already acting on this. Some vibe code entire enterprise-level products, like Vanta. Others want to replace Oracle, Salesforce and SAP. According to Retool is 35% of teams already replacing SaaS vendors with custom in-house (vibe) coded solutions.

You still need human judgement. Someone has to shape the architecture and match the requirements, which are usually implicit, to the business objectives. So most businesses with a software component will still need engineers, just far fewer than today.

Those engineers will look more like car mechanics. Something breaks, you hire someone who can fix it. Businesses will contract an engineer to maintain a specific piece of software. Generating software is not the moat anymore. Making sure your business can rely on it, that the code is secure and keeps working, still takes a human.

As a business you still want speed and reliability. What changes is how you decide what the product should do. The end user can take a much larger role in that. AI closes the gap between end user, product owner and software engineer.

That gap is what makes SaaS wasteful today. Most customers use about 20% of a product’s features, pay for the other 80%, and swallow a UX built for someone else’s persona. With AI they can have exactly the 20% they need, built and maintained for them.

So selling software as the end product stops being competitive. The product is the team that keeps the software running. Software is shifting from a product industry to a service industry.

Instead of Software as a Service, I think the future is Software is a Service: SiaS.