alt Hacker NewsI agree about boutique software, but see the development still being external -
To attempt to summarize the debate, there seems to be three prevailing schools of thought:
1. Status Quo + AI. SaaS companies will adopt AI and not lose share. Everyone keeps paying for the same SaaS plus a few bells and whistles. This seems unlikely given AI makes it dramatically cheaper to build and maintain SaaS. Incumbents will save on COGS, but have to cut their pricing (which is a hard sell to investors in the short term).
2. SaaS gets eaten by internal development (per OP). Unlikely in short/medium term (as most commenters highlight). See: complete cloud adoption will take 30+ years (shows that even obviously positive ROI development often does not happen). This view reminds me a bit of the (in)famous DropBox HN comment(1) - the average HN commenter is 100x more minded to hack and maintain their own tool than the market.
benzible (commenter) elsewhere said this well - "The bottleneck is still knowing what to build, not building. A lot of the value in our product is in decisions users don't even know we made for them. Domain expertise + tight feedback loop with users can't be replicated by an internal developer in an afternoon."
This same logic explains why external boutique beats internal builds --
3. AI helps boutique-software flourish because it changes vendor economics (not buyer economics). Whereas previously an ERP for a specific niche industry (e.g. wealth managers who only work with Canadian / US cross-border clients) would have had to make do with a non-specific ERP, there will now be a custom solution for them. Before AI, the $20MM TAM for this product would have made it a non-starter for VC backed startups. But now, a two person team can build and maintain a product that previously took ten devs. Distribution becomes the bottleneck.
This trend has been ongoing for a while -- Toast, Procore, Veeva -- AI just accelerates it.
If I had to guess, I expect some combination of all three - some incumbents will adapt well, cut pricing, and expand their offering. Some customers will move development in house (e.g. I have already seen several large private equity firms creating their own internal AI tooling teams rather than pay for expensive external vendors). And there will be a major flourishing of boutique tools.
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I like this thoughtful and nuanced response, I think you could be right. Makes me wonder if choosing an extremely boring niche and just making several million dollars could be a good move right now.
Author here, really good comment and I agree with you.
What _has_ surprised me though is just how many companies are (or are considering) building 'internal' tooling to replace SaaS they are not happy with. These are not the classic HN types whatsoever. I think when non technical people get to play with AI software dev they go 'wow so why can't we do everything like this'.
I think your point 3 is really interesting too.
But yes the point of my article (hopefully) wasn't that SaaS is overnight dead, but some thin/lower "quality" products are potentially in real trouble.
People will still buy and use expertly designed products that are really nice to use. But a lot of b2b SaaS is not that, its a slow clunky mess that wants to make you scream!