The three forces reshaping the future of enterprise Saa S | Tech Radar

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The three forces reshaping the future of enterprise Saa S

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Global Head of AI for Government, and Head of AI Delivery at NTT DATA.

Agentic AI is beginning to change that. As users increasingly deploy AI agents, either to carry out tasks within Saa S platforms or to deliver functionality outside them, organizations require fewer seats – hitting providers’ subscription revenues.

At the same time, AI is making bespoke software faster and cheaper to build, giving organizations a credible alternative to buying another Saa S platform. Why accept subscription costs and vendor lock-in, when cheaper alternatives may achieve the same outcome?

None of this means Saa S is about to disappear, but its position at the center of enterprise software is under threat. Saa S vendors are facing three structural challenges that will reshape the economics of enterprise software.

The first threat is simple: users may have AI agents carry out tasks within the Saa S platform, reducing the need for human users, or build agentic capabilities outside those platforms altogether.

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That is a serious problem for any Saa S vendor whose business depends on people living in the interface. If an agent can resolve a support query, update a record or complete a routine transaction, the user never has to touch the application.

We’re already seeing this in practice. In some IT service management projects, agents now resolve such a high proportion of tickets that organizations need far fewer users interacting with the Saa S platform. As buyers begin questioning whether they still need premium software for the shrinking proportion of manual work, the economics start to shift.

The second threat is the one Saa S vendors dislike most: buyers may once again be willing to build new capabilities from scratch.

For the last decade or so, ‘build versus buy’ was often a non-debate. Custom software was too slow, too expensive and too risky, so Saa S usually won.

AI is starting to shift those calculations. As software development becomes faster, cheaper and more adaptive, some solutions that previously defaulted to Saa S start to look buildable – especially when the organization needs a narrow set of capabilities wrapped around its own processes and data. The more customization a Saa S platform requires, the weaker its cost-efficiency and automated-upgrade advantages become.

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This does not mean large enterprises will abandon mature Saa S platforms overnight. Their resilience, integrations and compliance capabilities remain valuable. But once customers believe they have a credible alternative, vendors lose pricing power and the assumption that renewal is the obvious decision

The third threat is that even when the product survives, the commercial model may not.

Traditional Saa S pricing was built for a world in which value correlated reasonably well with the number of people sitting in the application. That logic gets shaky when agents perform work that would once have required more licensed users, and more operational dependency on the interface.

Vendors can see this. Many are shifting towards consumption-based pricing, exposing services directly to agents or redesigning products for an agentic world. The common thread is clear: once software starts working for people rather than being operated by them, seat-based economics begin to look outdated.

From the customer’s perspective, that could be a good thing. Paying for usage is often cheaper than buying licenses. The challenge for vendors will be proving they’re genuinely adapting to an agentic future, rather than simply repackaging existing products to protect margins.

To be clear, this is not a “Saa S is over” argument. Many enterprise platforms will remain valuable, providing governance, resilience, compliance, and years of accumulated functionality that are difficult and expensive to recreate.

What will change is where value sits. In an agentic world, Saa S will be less the primary interface through which work gets done; more a component in a broader ecosystem of agents, orchestration and systems of record. Some platforms will adapt and become stronger; others will discover that the value they once captured has shifted elsewhere.

As for the corporate users of Saa S, the best advice we can give is not to wait for perfect conditions before acting. No business ever reaches a point where its data, processes or architecture are “finished”, and Saa S providers will continue to adapt their offers.

Meanwhile, experiment, learn and adapt in your delivery of administrative and corporate functions: in some functions you may find that agents drive down Saa S costs; in others, greenfield development may now be viable. In still other cases, adding new functionality using agents that leverage Saa S solutions but sit outside those ecosystems keep future options open.

So do something that works for you now – but keep the option of moving again in a year or two.

This article was produced as part of Tech Radar Pro Perspectives, our channel to feature the best and brightest minds in the technology industry today.

The views expressed here are those of the author and are not necessarily those of Tech Radar Pro or Future plc. If you are interested in contributing find out more here: https://www.techradar.com/pro/perspectives-how-to-submit

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