The End of SaaS as We Know It: Embracing the 'No SaaS?' Future

The software-as-a-service (SaaS) industry has undergone a profound evolution since its inception, becoming a cornerstone of modern business operations. SaaS revolutionized how we deliver software, making it accessible, scalable, and affordable. However, as with all technological revolutions, the landscape is shifting once again. SaaS is increasingly becoming a commodity, driven by the saturation of point solutions and the rise of generative AI. The traditional SaaS model as we know it is being upended, and for founders and CEOs, this evolution presents both challenges and opportunities as they navigate a world where the very concept of software products is being redefined.

The Commoditization of SaaS

Commoditization occurs when products become indistinguishable from one another, leading to intense price competition, lower margins, and ultimately, a race to the bottom. This phenomenon is currently sweeping through the SaaS industry. With so many similar products available, differentiation is becoming increasingly difficult, driving down prices and making it harder for companies to sustain their growth.

Recent research underscores this trend. McKinsey reports that growth rates for SaaS companies are slowing, with only the top quartile achieving revenue growth above 40%. In contrast, many companies struggle to maintain their growth trajectory, signaling that the SaaS market is becoming more competitive and commoditized (McKinsey & Company).

BCG's findings further reveal that while the B2B SaaS sector continues to grow, it faces intense competition, particularly as new entrants flood the market with similar solutions at lower prices. The result? Higher customer acquisition costs and longer payback periods make it harder for SaaS companies to achieve sustainable profitability (BCG Global).

Even as SaaS adoption continues to rise, the growth rate is beginning to plateau. A study by BMC highlights that while SaaS remains a dominant cloud service, its growth is slowing compared to other cloud services like PaaS and IaaS. This trend indicates that SaaS is becoming a standardized offering, no longer the innovative solution it once was (BMC).

Navigating the 'No SaaS?' Future with Platforms

Given this landscape, how should companies respond? At Engineered Innovation Group, we've helped over two dozen SaaS companies, as well as numerous midmarket, VC-backed, PE-backed, and enterprise organizations, navigate the complexities of the software space. Through this experience, we've seen firsthand the power of a platform.

A software platform is fundamentally different from a conventional SaaS product. While SaaS typically delivers a single solution or set of solutions, a platform provides a foundation that integrates various tools, services, and data sources, enabling users to build and deploy new capabilities rapidly. Unlike traditional SaaS, which can be limited by predefined functionalities, platforms are designed to be flexible, scalable, and adaptable to evolving business needs.

Consider how platforms can represent the next generation of software—where tasks that were once standalone products are now seamlessly integrated capabilities. Whether you need to draft a sales email, automate customer follow-ups, or generate reports, these are no longer individual products you purchase; they are capabilities built into the platform, accessible on-demand.

Platforms allow businesses to move beyond the constraints of traditional software, enabling them to create, launch, and maintain these capabilities with unprecedented ease. This shift is not just an evolution; it’s a revolution. By transforming what software can do, we’re paving the way for a future where technology doesn’t just support your business—it propels it forward.

Why the Shift to Platforms Matters

The move towards platforms is more than a trend; staying competitive in the modern software landscape is necessary. Founders face the challenge that the way we build software is already changing. What used to take years and hundreds of thousands of dollars with highly paid engineers and large teams is now being achieved in a fraction of the time and cost.

At Engineered Innovation Group, we've proven this point. A prime example is a product, where we built a product-ready version in just six weeks. This rapid development cycle is not an anomaly—it's becoming the new norm. The efficiency and speed with which platforms can be built and deployed mean businesses must adapt or risk being left behind.

The critical question for any founder is: How will my competitors leverage generative AI to build strategies and software that plug into the ecosystem more effectively than my product? Ten years ago, apps and point solutions were essential. As SaaS progressed, products became increasingly niche. It was normal for a team member to encounter a problem—such as needing to summarize sales notes and track follow-ups better—and for a company to build a SaaS product around that specific use case. These products could be sold for $25 per user, and a business could be built around that model.

However, that type of use case doesn’t require spinning up a new company in today's environment. Instead, the AI ecosystem makes it easier than ever for users to get what they need through conversation and integration with existing systems. The SaaS of the past is giving way to platforms where capabilities are embedded within the broader business ecosystem, ready to be deployed at a moment’s notice.

The SaaS Business Model: A Reality Check

Let’s be clear: while there will always be a need for SaaS, the traditional SaaS product model is becoming less important, and the SaaS business model itself is under serious threat—for good reason. The days when SaaS could thrive simply by offering software via a subscription model are numbered. Businesses are no longer content with paying ongoing fees for services they could develop and maintain in-house, especially when generative AI and modern platforms make it easier than ever to build custom solutions.

This shift is forcing SaaS companies to rethink their entire value proposition. It’s no longer enough to offer a reliable, scalable product; customers now demand more. They expect SaaS providers to offer continuous, tangible value that goes beyond just software—whether that’s through unparalleled integration, personalized services, or leveraging unique data insights. In a world where businesses can increasingly bypass SaaS altogether, the pressure is on for SaaS companies to prove why their subscription fees are still worth paying.

This isn't about scaring you—it's about preparing you for the future. The landscape is changing, and those who embrace this shift will thrive, while those who cling to outdated models risk being left behind. It's an exciting time for innovation, but it requires a new mindset and a willingness to challenge the status quo. At Engineered Innovation Group, we're here to help you navigate this new world and turn these challenges into opportunities.

What Should Organizations Do?

The time to act is now for existing SaaS companies and businesses looking to automate and get more from their current software. Founders must rethink how they plug their existing data and functions into the AI ecosystem. Consider how your product could provide value as a service, leverage your valuable data, or utilize existing algorithms—all without relying on a conventional SaaS interface. Imagine your product in a world where users no longer need to interact with it directly through a traditional UI but instead through AI-driven conversations that pull from multiple data sources and deliver instant value.

The key takeaway for founders is that how we build software is rapidly changing. Generative AI enables businesses to build strategies and software faster and more efficiently than ever. If your product isn't evolving to meet these changes, you risk being left behind by competitors already leveraging these new technologies.

Conclusion: Embrace the 'No SaaS?' Future

The commoditization of SaaS is accelerating, driven by the rise of generative AI and the oversaturation of point solutions. In this 'No SaaS?' future, the traditional software model is being replaced by on-demand, AI-driven experiences that redefine what a product is. Platforms exemplify this shift, offering the flexibility, scalability, and integration needed to thrive in this new landscape.

The opportunities are vast for those willing to embrace this change, but it requires a fundamental rethinking of how we build, market, and deliver software solutions in the years to come. At Engineered Innovation Group, we're leading this charge, helping companies navigate the complexities of this new world and build the next generation of software platforms.

If you are thinking about building software, SaaS, or process automation, let’s talk. Together, we can explore how your business can leverage the power of platforms to survive and thrive, ensuring a cost-effective and profitable path with real ROI for YOU.