Why SaaS Will Outlive Your Obituaries

• source https://world.hey.com/joan.westenberg/why-saas-will-outlive-your-obituaries-b2767143

• by JA Westenberg

• … railroads declined because they had confused their tool for the job itself.

  • … railroad business specifically, not the transportation business.

• … read the various viral obituaries for software-as-a-service. …

  • SaaS is dead.
    • Vibecoding is the future.

• saas has always been The Peculiar Bargain.

  • company that built it agrees to keep the lights on,
    • keep the servers running,
    • push out updates and
    • absorb the maintenance burdens that used to fall on either you or your own IT department.

• Salesforce pioneered the model …

  • “No Software”
    • no longer have to install anything, patch anything, or hire a small army to keep a server farm humming in the basement; you just log in.

• Software was hard. It required engineers - who were expensive and scarce - along with designers, testers, infrastructure, security, etc.

• … fact that software was hard to build was precisely why you’d pay someone else to have done the building. Anybody could have the idea, but the moat was the doing.

• … thin tools are at risk: the wrappers and the single-feature products that pushed an interface onto a problem that turns out to be (in the age of generative models) a five-minute conversation.

• … software, the hard part isn’t actually the code at all. It’s everything wrapped around the code - and almost none of that gets cheaper just because the code was slashed.

• What separates a company that can run payroll from an awfully clever fellow with a model is the

  • thicket of tax compliance, across thousands of jurisdictions, and the regulatory relationships, and the
  • legal liabilities when you get some asshole’s withholding wrong, and the
  • integrations with banks that took years and lawyers to establish, and the
  • simple fact that businesses run by sane men who aren’t sado-masochists don’t actually want to experiment with whether or not their staff get paid this Friday.

• Customers are buying trust, and the

  • software is simply the place where they keep it.

• Economists have a wonderfully bloodless phrase for this: switching costs.

  • Jun 3rd, 2026 Jean-Denis Caron moat

• … engineers most excited about AI tend to underrate what software actually represents inside an organisation - because they think about software as mere code, while

  • businesses think about software as a safe place to keep their promises.
  • … buying a place to put liability - … assurance that when something goes wrong (and something always goes wrong) there’s a company with insurance, and a legal department, and a contract on the other end of the phone.

• … customer pays for accountability they’re buying the most valuable thing any vendor can sell; which is why the

  • largest organisations on this rock almost never buy the cheap, flexible option.
    • They buy the vendor who has a compliance team and an army of support staff who’ll pick up the phone at 3am and own the problem.
    • If you hand all the responsibility back to the user, a serious enterprise will decline …

• … question becomes what job the company is actually being hired to do.

  • If that job is to perform a discrete task that a model can now perform, that company is in deep, deep shit - and they probably know it.
  • … if the job is to be the
    • trusted,
    • accountable and
    • deeply integrated system of record, where an
      • organisation keeps something it cannot afford to lose,
    • …the founders of that company have little to fear from disposable code.

• … cost of running the software approaches zero and they find the value elsewhere.

• … handful of profitable companies have always gone against the grain - they ran their machines in their own racks, rather than renting compute power back from a landlord at a steep markup …

• … single-feature startups get washed away in the most brutal consolidation the industry has ever seen? Absolutely …

• … “software” business as the railroad men were in the locomotive business; they’re in the trust business, the integration business, and the accountability business; they’re in the business of being the place where a company keeps the things it can’t afford to break.

• … code was always the cheap part; we’re only now finding out how cheap.

  • But everything else still costs what it costs.

Jun 3rd, 2026 by Jean-Denis Caron

• Trust is what matters, and trust is not gained by just creating software, it’s gained by proving quality-security, proving that you have a bus factor greater than one. You can convince people to join your organisation.
  • Related to a note I took recently about The Quiet Renovation at Bitwarden:
  • source https://blog.ppb1701.com/the-quiet-renovation-at-bitwarden

  • The pattern is always the same: build trust, establish dependency, then quietly renegotiate the terms.

• … single-feature startups get washed away in the most brutal consolidation the industry has ever seen? Absolutely …

  • Similar to an observation by Simon Willison which he call deep blue :

  • Then I tried … ChatGPT Code Interpreter … 2023 … it did every piece of data cleanup and analysis I had on my napkin roadmap for the next few years with a couple of prompts.