I don’t know what you build, but I’ll share some thoughts from the other side (customer):
Many SaaS products I am interested in have very little “moat”. I am interested in them not because I can’t build them, but because my limited engineering time is better spent building business specific stuff.
Many products with product management teams spend a lot of their effort building functionality either to delight their highest paying customers, or features that are expected to be high-revenue.
I’m never going to be your highest paying customers, so I’m never going to get custom work from you (primarily orienting workflows to existing workflows inside your customers).
What everyone wants when they buys SaaS is to get value from it immediately without having to change our internal processes, broken as they are. But your model of feature prioritization is antithetical to this; you don’t want to build or support the 5-10 integration points I want; because that would allow me to build my own customizations without paying for your upsells.
You aren’t at immediate risk from agentic Ai from losing your big customers. But Agentic AI is enabling me and thousands of others to build hobby projects that deliver part of your core value but with limitless integration. I expect that you’ll see bleeding from the smallish customers way before you see hits from your whales.
However in a couple of years there will be OSS alternatives to what you do, and they will only become more appealing, rapidly.
As a side note it’s not just license pricing that will drive customers to agentically-coded solutions; it’s licensing terms. Nowadays whenever I evaluate SaaS or open source, if it’s not fully published on GitHub and Apache or MIT licensed, then I seriously consider just coding up an alternative - I’ve done this several times now. It’s never been easier.
The OSS point doesn't apply to every vertical. Open source applications come about when developers scratch their own itch. Developer tools, infrastructure, general purpose CRMs, project management get OSS alternatives because developers use them and want to build them.
Nobody is building open source software for [niche professional vertical] in their spare time. It's not mass market. It's not something a developer encounters in their daily work and thinks "I could do this better." The domain knowledge required to even understand the problem space takes months to acquire, and there's no personal payoff for doing so.
The "OSS will appear" prediction works for horizontal tools. For deep vertical SaaS, the threat model is different: it's other funded startups or internal enterprise clones (both of which we've already faced and won against).
> Nobody is building open source software for [niche professional vertical] in their spare time.
As a matter of fact, I am (in the computer security vertical) - look for an announcement on Hacker News at the beginning of the year. I suspect that others are too, but there's always a discoverability problem for niche tools in verticals that one doesn't participate in, e.g. I know nothing about software for dentists but I know that at least one exists, and that there are probably a lot of dentists who use it but resent the fees, features or support, and there are probably some dentists who could manage an agentic coding project.
There have ALWAYS been niche OSS projects, and agentic coding will make them better and more prolific.
There are people like me who are passionate about a space and have the skills to manage an agentic coding project and the domain knowledge to design the software that they want, but not the skills and time necessary to have built the software in the absence of agentic AI. Last year I would never have started my 100k+ LoC project. This year I am proposing colleagues at two Fortune 50 companies to adopt it (at zero financial benefit to me). I am doing this from love of the problem space and desire to improve software security across the industry.
[niche professional vertical] in my response was a stand-in for the specific vertical my startup targets, which is light years from computer security. Computer security is a vertical where the practitioners are often developers or developer-adjacent. You're building tools for people like yourself. That's exactly the "scratch your own itch" dynamic I'm describing.
The vertical I'm in has zero overlap with the developer population. The end users aren't technical, don't participate on HN, and aren't going to "manage an agentic coding project." There's no equivalent of a developer who moonlights on OSS tooling because they're passionate about the problem space, because the problem space requires domain expertise that developers have no reason to acquire.
Many SaaS products I am interested in have very little “moat”. I am interested in them not because I can’t build them, but because my limited engineering time is better spent building business specific stuff.
Many products with product management teams spend a lot of their effort building functionality either to delight their highest paying customers, or features that are expected to be high-revenue.
I’m never going to be your highest paying customers, so I’m never going to get custom work from you (primarily orienting workflows to existing workflows inside your customers).
What everyone wants when they buys SaaS is to get value from it immediately without having to change our internal processes, broken as they are. But your model of feature prioritization is antithetical to this; you don’t want to build or support the 5-10 integration points I want; because that would allow me to build my own customizations without paying for your upsells.
You aren’t at immediate risk from agentic Ai from losing your big customers. But Agentic AI is enabling me and thousands of others to build hobby projects that deliver part of your core value but with limitless integration. I expect that you’ll see bleeding from the smallish customers way before you see hits from your whales.
However in a couple of years there will be OSS alternatives to what you do, and they will only become more appealing, rapidly.
As a side note it’s not just license pricing that will drive customers to agentically-coded solutions; it’s licensing terms. Nowadays whenever I evaluate SaaS or open source, if it’s not fully published on GitHub and Apache or MIT licensed, then I seriously consider just coding up an alternative - I’ve done this several times now. It’s never been easier.