Individuals and SMB might stick with Saas but those don't pay much.
Enterprise customers have the means to develop in house, those are the customers that will leave. And those are the whales of the Saas business.
Enterprise customers have the means to develop in house, those are the customers that will leave. And those are the whales of the Saas business.
It sounds nice, but now you have something that takes an enormous amount of time and effort to use and maintain, plus you need to have someone with the skills to run it.
> Enterprises have a business to run and don’t want to run a software shop on top of everything else.
It sounds like you mostly understand here. The biggest part of "running a software shop" they want to avoid is responsibility for support, bugs, fires, ongoing maintenance, and legal issues, of post-release software.
Dave's Pizza around the corner doesn't make a social media app, not because Dave can't figure it out, not because he can't vibe code one, not because he can't contract someone to do it, but because running a social media site isn't a core competency of Dave's Pizza. Instead, Dave uses existing social media sites, and focuses his efforts and passions on making pizza.
saas value to an enterprise is more than just the functionality provided and I think that is lost on a lot of the heads down software devs here.
Most enterprise companies don't develop everything in house, but usually do have a varied mix of in-house infrastructure, IaaS and PaaS solutions, and SaaS products. Large organizations across varied industries often have multiple internal dev teams, and the availability of increasingly sophisticated AI tools is going to enable the same teams to be effective at more, and more complex, projects. AI will definitely start shifting make-or-buy decisions, especially for mature, commodity use cases, to 'make'.
This is why companies outsource anything. Google, Inc. is big enough to own farms and ranches to grow the food eaten in its cafeterias. They could make trucks to transport that food. They could operate factories to make cutlery, etc. Why do they instead choose to pay layers of margins to layers of middlemen?
Absurd example? How about Apple? They outsource production of their chips, instead of capturing the margin they are currently gifting to their partners. Why?
Delta Airlines doesn’t operate oil fields or even refineries even though a major cost of their operations is jet fuel. Why?
Once you can reason through these very simple examples, you will understand why enterprises are unlikely to walk away from SaaS.
https://en.wikipedia.org/wiki/Trainer_Refinery
https://www.reuters.com/business/energy/delta-air-lines-refi...
s/Delta/United/ or s/Delta/Southwest/ or s/Delta/Lufthansa/. Or if you prefer, s/refinery/oilfield, or s/refinery/pipeline. Or even s/refinery/farm/ because Delta also buys food in vast quantities (I would not be surprised to find they have interests in ag producers that offset a small % of their food purchases, which does not diminish the argument).
Delta also does not make airplanes, jet engines, seats, radios, GPS, glass, or even wires. They don't distill the spirits they serve on their flights. They don't own and operate a satellite Internet capability. They don't even make movies for in-flight entertainment.
The point is that Delta, like most successful firms, outsources key aspects of core service delivery.
The second article you linked says plainly that the refinery is an offset/hedge. QED Delta still outsources the vast majority of its fuel costs. (They could, for example, own large swathes of the Permian and do E&P as well. They choose to leave that to others.)
Most large firms have in-house software dev teams responsible for at least some portion of their development work. I know software engineers locally working, variously, at banks, pet supply distributors, power companies, soft drink bottlers, and many other non-tech industries. And AI can and will extend these teams' capacity to internally manager larger segments of their companies' tech stacks.