The End of SaaS - 2027

The End of SaaS, or Just the Quiet Demotion?

In October 2025, I wrote that SaaS was ending.

That line raised eyebrows. It still does. Yet the product roadmaps and the earnings calls are starting to rhyme.

The claim was never that spreadsheets, forecasts, proposals, invoices, or CRM records disappear. The deliverables stay. The engine shifts.

Agents as the Unit of Work

Satya Nadella said in 2023, “The next generation of SaaS is agents.” 

Read that carefully. The agent becomes the unit of execution. The application becomes storage, permissions, and transaction rails.

Klarna provided a field example in February 2024. Its OpenAI-powered assistant handled 2.3 million conversations in its first month, roughly two-thirds of customer service chats. Klarna stated this equated to the work of 700 full-time agents. The company reported a 25 percent reduction in repeat inquiries, resolution time dropping from 11 minutes to under 2 minutes, and an estimated $40 million profit improvement for 2024 tied to the shift. 

No one mentioned how much they loved the interface. They talked about repeat rates, minutes, and margin.

That is not a UI story. That is an output story.

Microsoft’s 2024 annual report stated that employees at nearly 60 percent of the Fortune 500 use Copilot to complete tasks faster, run meetings, and automate processes. Source: Microsoft 2024 Annual Report.

Word and Excel did not vanish. They moved into the background. The worker starts with intent and receives a draft, a table, a summary. The file format remains. The cognitive lift migrates upward.

GitHub research with Accenture reported developers using Copilot completed coding tasks faster, and productivity gains were emphasized as a central outcome.

In April 2025, TechCrunch reported Nadella saying that 20 to 30 percent of code inside Microsoft repositories was “written by software.”

The percentage will fluctuate. The pattern is clear. The IDE remains open. The agent produces a growing share of the code.

What the Market Is Pricing

This is not only product chatter. It shows up in valuation.

Bessemer Venture Partners’ Cloud 100 Benchmarks Report 2025 reported average Cloud 100 revenue multiples falling for the third consecutive year to 20x in 2025, down from 23x in 2024 and 26x in 2023, and down 41 percent from the 2021 peak. The same report noted Ai companies trading at higher multiples than non-Ai peers. 

SaaStr, citing Clouded Judgement analysis, reported aggregate quarterly net new ARR across the cloud software universe dropped to $1.65 billion in Q1 2025 from $2.33 billion in Q1 2024, a 29 percent year-over-year decline. 

Multiples compress. Net new ARR slows. Ai-native firms price at premiums.

That is not sentiment. That is repricing.

In early February 2026, Zoho founder Sridhar Vembu described the SaaS industry as ripe for consolidation and noted that Ai accelerates the pressure already present. 

Founders tend to speak plainly when margins tighten.

From Interface to Orchestration

Look at the traditional stack.

A CRM is largely a compliance engine. Data entry, stage tracking, managerial reporting. When an agent can transcribe calls, summarize them, update records, and draft follow-ups, the CRM becomes a datastore and permission layer.

An ERP is a ledger with constraints. When an agent reconciles transactions, flags anomalies, drafts explanations, and routes approvals, the ERP persists as infrastructure. The human interface recedes.

Email is a transport layer. When an agent drafts, summarizes, and schedules, the inbox becomes an archive of actions already taken.

This is how applications get “replaced.” Not through uninstalling. Through invisibility.

When the worker stops thinking, “Open Excel,” and starts thinking, “Show me the analysis,” the spreadsheet shifts from operating system to rendering surface.

Relevance beats interface.

Billing Models Under Pressure

Seat licenses assume people log in and operate software.

Agent-driven models assume work can be completed without constant human navigation.

Over a single weekend, one major LLM provider released 11 modular capability updates. The technical details matter less than the billing implications. Modular capability erodes the logic of charging per seat for monolithic access.

In 2024 and 2025, major accounting and consulting firms, including KPMG, publicly discussed productivity gains from generative Ai in audit and advisory workflows. When hours compress, procurement notices. Billing models adjust.

Google reported pressure on core search growth in 2024 as generative Ai summaries began changing user behavior. Enterprise surveys also showed mixed Copilot adoption, which suggests embedding Ai inside legacy products does not automatically restore pricing power. 

The pressure is structural. If report preparation time falls, reconciliation hours fall, and support staffing shifts, pricing models built around human effort encounter friction.

Labor compresses. Subscription justification compresses.

The Gregorian Axiom

For the last three years, I have said:

It is not Ai inside your calculator, CRM, email client, operating system, or browser.

It is your calculator, CRM, email client, operating system, and browser inside your Ai.

That line is not poetic. It is architectural.

We will not start with Windows, rows and columns, margins and fonts. We will not begin in Gmail or a CRM tab. The interaction begins with intent. The system returns the deliverable.

Inventory report. Projection. Cost analysis. Board-ready memo. Drafted and routed.

Ask. Receive.

The infrastructure does not disappear. Databases, ledgers, compliance engines, and communication rails remain necessary. What changes is which layer captures margin and mindshare.

SaaS does not vanish overnight. It is economically demoted.

When users no longer live inside a branded interface, the subscription resembles a conduit rather than a command center.

In this cycle, orchestration owns leverage. Interfaces become interchangeable.

The market is already adjusting to that math.

Source: TechCrunch, April 29, 2025.

Source: BVP Cloud 100 Benchmarks Report 2025.

Source: GitHub research reporting, May 2024.

Source: SaaStr, 2025.

Source: Microsoft remarks, 2023.

Source: Business Today, February 4, 2026; Economic Times, February 2026.

Source: Klarna press release, February 27, 2024. 

Source: public earnings disclosures and enterprise surveys, 2024 to 2025.