While AI expands software's capabilities, vendors may not capture the value. Companies could use AI to build solutions in-house more cheaply. Furthermore, traditional "per-seat" pricing models are undermined when AI reduces the number of employees required, potentially shrinking revenue even as the software delivers more value.

Software that is priced per seat and easy to replace, like Zendesk for customer support, is under existential threat from AI. Customers can run AI agents in parallel to perform the same tasks, directly comparing performance and cost, making it easy to reduce seats and switch providers.

In categories like customer support, where AI can handle the vast majority of queries, charging per human agent ('per seat') no longer makes sense. The business model is shifting to be outcome-based, where customers pay for the value delivered, such as per ticket resolved or per successful interaction.

As AI agents reduce the number of human "seats" required to use software, vendors are accelerating their move from seat-based licenses to usage-based models. The revenue lost from fewer users is expected to be offset by higher consumption, as automated workflows interact with platforms far more intensively than human employees.

The dominant per-user-per-month SaaS business model is becoming obsolete for AI-native companies. The new standard is consumption or outcome-based pricing. Customers will pay for the specific task an AI completes or the value it generates, not for a seat license, fundamentally changing how software is sold.

The fundamental business model of many SaaS companies is based on per-user pricing. AI agents pose an existential threat to this model by enabling smaller teams to achieve the same output as larger ones. As companies wonder why they should pay for 100 seats when 10 people can do the work, the entire economic foundation of the SaaS industry faces a crisis.

The challenge for SaaS isn't simply adding an AI agent. Growth is attacked by shrinking workforces (seat contraction), CIO budgets shifting to AI, and aggressive price hikes that eliminate upsell opportunities. This combination makes returning to the high-growth, high-NRR days of the past unlikely.

As AI agents perform more work and human headcount decreases, the traditional seat-based pricing model becomes obsolete. The value is no longer tied to human users. SaaS companies must transition to consumption-based models that charge for the automated work performed and value generated by AI.

The push for AI-driven efficiency means many companies are past 'peak employee.' This creates a scenario analogous to a country with a declining population, where the total number of available seats is in permanent decline, making per-seat pricing a fundamentally flawed long-term business model.