This is largely how things work now; AI may lower the cost and increase margins, but the economics of build vs buy seem the same.
Yes, the vendors want subscriptions and cloud and not owning anything, but customers also don't want to hire people to operate the infrastructure required to run this stuff themselves. That's the whole point of SaaS, and why some companies just run entirely on that model and basically have no in-house IT staff
That AI means you can write and run your own payroll system doesn't mean all of a sudden a world of people with zero technical skills can start doing it on their own
The person with zero technical skills could start learning primitive technology: youtube.com/@primitivetechnology9550 - living off the land really is the job for the unemployed. We've done it before! As long as there is a safe place to actually do it and a planet that can support it. Those'll be the problems.
Basically I expect way smaller companies popping up competing with the big ones and their offering will be priced way lower because their payroll is way smaller.
While there is no competitor, internal tools will pop up now.
Another great example is open source. I think PostgreSQL being free and usable by everyone is a more economic outcome than every Fortune 500 company building their own database engine. Payroll, ERP, and CRM fall into the same category of being commodity software in a lot of cases.
So now consider AI, perhaps the cost of building has decreased from 100k to 10k. What stops a Slack competitor from also building the product for 10k and reselling it at 10% of the cost of Slack? My point is that I don’t see how AI has changed the value prop.
I do not actually believe that you can trivially vibe code a viable slack replacement. But even if one day we could it wouldn’t mean that Slack as a company would just disappear overnight.
They would hang around serving companies who haven’t got the memo yet, or who are locked in a contract, or where the internal political situation is against such a move. The innertia of a bunch of humans behaving like a bunch of humans would provide a sort of “coyote time” effect where the fundamentals could fall out from under Slack yet the company would keep “floating” for a while.
It is funny how much of your question sounds like the old joke where an economist can’t believe their eyes that a $20 bill is laying on the pavement, because surely if it were so someone would have already picked it up. In a steady state the logic might hold up, but we are not in a steady state.
And that is separate from why do I think it is not realistic to just replace slack with vibe coded alternative: just in my company some people use the web interface, some the ios app and some the android app. To be a viable replacement you would need all 3 platforms supported with all features. That sounds in itself a nightmare. Then figuring out what features my company members really use is an other nightmare. There are some who craft custom emojis all the time, some who integrate all kind of weird apps. We various CI and data pipeline processes integrated with slack reporting. And then comes huddle. Video and voice chat and screen sharing. You can even draw on someone else’s screen with it! IT has their needs to archive things (maybe?) or snoop on certain things. Then comes of course interfacing with single-sign-on. I wouldn’t even volunteer to enumerate all the different features people just at my company depend on, let alone offer to replace it.
Also Is there not a self hosted open source solution that companies can host ? That’s easier than ai?
Slack exists in part because ten years ago it was a lot harder for big orgs to make good/modern software.
At the very least, the return is not worth the time and effort.
I think a more likely scenario here is that something good and free escapes containment at some point and Slack’s core product just kind of deflates. Not something better than Slack, but something good enough that people don’t care about Slack any more.
I don’t see it as a question of whether you build it or buy it, but a question of the time horizon for selling messaging software as a business strategy. Most business strategies have a finite time horizon. How long can you continue to sell messaging software before there are too many competing solutions available and you stop making money from it?
Web browsers used to be exclusively paid software, if you were serious. So did operating systems, SQL databases, C++ compilers, and video codecs.
You're too heavily discounting the effort to maintain, deploy, and scale a service like Slack.
I don’t think “categorically different” has legs. I work on the operations & hosting side of applications like this. There’s an operations burden to maintain, deploy, and scale web servers. There’s a burden to rolling out new Linux kernel versions to servers. But we still do it! There would be a burden to running your own Slack, just like there is a burden to running your own email, and people will choose to pay for hosted versions or host it themselves.
And then there are companies and organizations who have strong incentives to self-host to make compliance easier.
Of course it sucked and no one used it except executives and VPs. Everyone else did just enough to meet the minimum quarterly engagement metrics right before performance reviews.
1. They did, and still sell it. You can buy it.
2. They did, and then exited the market. Employees gradually migrated off the internal platform.
3. They weren’t in the business of selling software, and didn’t sell their internal messaging platform (which is idiosyncratic and closely integrated with other internal system).
I can't wait for orgs to try to vibe roll their own dozen clients, security models, and then try to talk to handle external integrations of some kind.
I imagine it's also infinitely better than anything an in house team could vibe code.
You don't need AI for a cheap slack alternative.
That's why I don't buy any of this.
Companies are not bothering with the free/open alternatives.
Unless the real power of LLMs is making it easy for greg in HR to self host these existing alternatives. But, that a trillion dollar market does not make.