SaaS is not dead
The last few months, we noticed a massive change in agentic coding: the release of Anthropic 4.6 models, along with the availability of more applications (e.g., opencode, codex, kilo) accelerates software development by a large order of magnitude. With the cost of writing code trending to 0, many claim that “SaaS is dead!” and companies will suddenly build their own applications internally.
I believe this is the wrong take.
Writing code is the cheapest aspect of building software. The majority of building software costs are operation (on-call, bug fixes) and maintenance (e.g., adding features, fixing vulnerabilities, deploying in the latest cloud infrastructure). Whoever wants to build their own SaaS will need to take on the maintenance and operational burden.
No one is realistically going to re-implement Gmail, Office 365, or Slack to avoid paying $10 to $20 per month. Companies buy SaaS applications to focus on their core business instead of going on side quests and implementing and maintaining some random software. A food business or a hardware store working on a website does not want to re-implement Slack, build an AWS replica, or re-implement Twilio. And the last thing they want is to re-implement an internal copycat of Workday (with all its legal subtleties) to handle HR concerns.
The few adventurous who want to embark on such a re-implementation crusade will ultimately need to hire engineers to maintain their custom software and ensure compliance with all applicable laws. Unless the company operates at a massive scale, the maintenance expenses will be far bigger than buying the SaaS equivalent.
On the other hand, the impact of agentic coding will lower the barrier to entry to build competitors to existing SaaS products. It will lead to more competition and, ultimately, more options for the customers, which is a good thing. It will also put pressure on existing players to deliver more value and/or lower their prices (and potentially, their margin).