Companies that cling to outdated SaaS models will struggle to compete.

The valuations of Software Companies have been trending downward for months. Specifically, Software Companies that are focused on what are called "Point Solutions" where the solutions they provide are narrow in scope, and provide specific "capabilities" to the End User's who use them. Some examples include Salesforce, Oracle, and Adobe. These solutions charge a monthly or annual fee, to provide specific functions to a business or firm. Every year, their solutions provide more capability, and complexity, and the End Users of these solutions become experts in their use. This model of software delivery has been around for nearly a generation, but as with many developments in Technology, this model is coming to the end of it's utility for what will turn out to be most businesses and firms.

Why would a company or a firm choose to end their investment in these types of software solutions?

The answer is because keeping these subscriptions is already expensive, and according to Gartner, businesses can expect an increase in software subscription costs to increase by as much as 40% by 2027. Click here to learn more about how Gartner sees things. If we are honest with our experience, in many cases, what most users have experienced is a combo platter of higher prices, less personalized support, and more complexity in the solutions that businesses and firms are investing time and money into.

The reason to get off the rat wheel of 'renting' software at premium prices, is that Artificial Intelligence will render the need for a "screen" or a graphical user interface less and less necessary, because with an AI Agent, a user can simply ask for whatever "report, data, question, or analysis" that they require, and the AI can deliver it, while asking "how" do you want to see it displayed?

So what should businesses and firms do?

Essentially all businesses and firms should begin the process of choosing a single platform provider, and begin moving their data to that platform. This should be done in conjunction with properly "organizing" and "structuring" that data so that the AI that is provided by the platform can work more efficiently and giver users better answers.

The second thing that should be done by businesses and firms is to begin the process of solving specific business workflow problems with solutions built "inside" of the platform they choose. For most companies and firms, this will mean, choosing a platform like Microsoft 365, where they are already storing Email's, Files/Documents, and Chat communications (Teams), where solutions can built with the data using the Power Platform.

Is this just hype, or are others seeing this as well?

Zeeshan Ali Shah, a thought leader in the space has recently published an article that is worth reading. In the article, he addresses the issues directly in everyday jargon free English to help decision makers take a closer look at their IT Dollar spend. Here is a link to his article, How AI is Reshaping Saas. If you would prefer a printable PDF of this article, click the link below.