Chapter 4 - SaaS is a Roaring Dinosaur
A “roaring Dinosaur” is a thing that’s facing a rapid evolution or perhaps even an extinction level event, but it doesn’t know it. Just like the dinosaurs in the last days of the Cretaceous Period.
And SaaS is definitely roaring.
Projected to grow from USD $315B in 2025 to USD $1.13T by 2032, it would appear to be a boomtown, but here’s the paradox. When you take the elevator down to the ground floor at the [enterprise] subscriber level, there’s systemic pain and a total over saturation.
Here are a few of the pain points
- SaaS sprawl: A small business with under 500 employees is already dealing with an average of 150+ apps. THAT’S CRAZY. The inefficiency inherent to this statistic gives me heartburn. But the annual spend on these platforms is put to good use though, right? NOPE.
- Shelfware: The ROI simply isn’t there because the platforms garnering these Billions are not getting used, 50% of SaaS licenses are reportedly unused for over 90 days.
- Subscription Fatigue: Consumer intolerance to learning, integrating, and working with a new platform is at an all time high. I mean, do YOU want any more monthly subscriptions in your life? Thought so.
If I haven’t convinced you that something’s gotta give in this *really* booming market, let’s examine where the REAL pressure’s coming from.
1. AI Agents will replace UI
The old model of selling software packed with features is becoming obsolete. AI Agentic workflows are poised to fundamentally change how we interact with databases, largely by replacing the need for traditional user interfaces (UIs). This is a fundamental architectural shift to the Frontend/Backend model we use today.
This means adding an "AI tier" at the top acting as the brain, where the business logic will reside. Traditional SaaS apps are demoted to "simplified back-ends," essentially becoming reliable data stores, and the UI itself becomes a unified, conversational interface that can dynamically generate visual elements when needed. Go play around with Claude and ask it to make you an interface, for well, ANYTHING 😆.
2. Outcome based pricing is closer than you think
The Agentic AI necessitates new pricing, because the per-seat model is fundamentally broken when AI reduces the number of users. Charging per use is where the whole thing is headed, look no further than credit based billing already common in the Generative imagery market. Examples include:
- Intercom charging $0.99 per successful resolution
- Riskified offering a "Chargeback Guarantee"
3. “Vertical SaaS” is an intermediary to a full on agentic overhaul to software architecture, and it’s here.
Think of this as platforms that connect an entire ecosystem's participants, such as doctors, patients, and insurers. This new model, which functions as a "Multi-Sided Platform," is the ultimate solution as it is designed to monetize the successful transactions and outcomes it facilitates, rather than just user access.
4. The move toward outcome-based pricing isn't just a nice idea—it's being forced by economic reality.
The major AI labs are already consolidating vertical expertise through acquisition, buying up SaaS companies not for their interfaces but for their training data and domain knowledge. Google, Microsoft, and OpenAI have the capital to absorb entire categories of software, and they're doing it because raw data that’s also in bounds is becoming a hotter commodity as the platforms progress. Instead, they're training separate models with vertical domain expertise and deploying them as mixtures of experts under unified conversational interfaces. This means the 150+ apps that small businesses currently juggle will collapse into a handful of agent-powered platforms that generate interfaces on demand.
So, if software doesn’t mean a static interface with a predefined feature set and per-user fee structure what are we left with?
This disruption in the SaaS market—driven largely by AI agents consolidating what used to require multiple platforms—creates an unexpected opening for creative professionals.
While the tech giants battle over general-purpose agents that can handle office tasks and customer service, there's an emerging opportunity in highly specialized, boutique tools built for specific creative processes. The same forces that are dismantling traditional SaaS make it viable to build narrow, purpose-built tools that automate the repeatable parts of a unique creative workflow in ways we haven't imagined yet.
This isn't about replacing creative work with agents—it's about recognizing that if "software" is being fundamentally redefined, creative professionals can define it for themselves.
When you build a custom tool that codifies your specific approach to video production, design ideation, strategic analysis, WHATEVER, you're not just streamlining your process.