The new generation of AI automates workflows, acting as "teammates" for employees. This creates entirely new, greenfield markets focused on productivity gains for every individual, representing a TAM potentially 10x larger than the previous SaaS era, which focused on replacing existing systems of record.

Ubiquitous local AI agents that can script any service and reverse-engineer APIs fundamentally threaten the SaaS recurring revenue model. If software lock-in becomes impossible, business models may shift back to selling expensive, open hardware as a one-time asset, a return to the "shrink wrap" era.

Turing's CEO claims SaaS is dead for two reasons. First, powerful foundation models drastically lower the cost of building custom software internally. Second, existing SaaS products are built for human interaction via GUIs, not for AI agents that will increasingly use APIs and tool-calling functions directly.

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.

AI agents can easily siphon off value from SaaS products priced on per-seat utility by automating tasks previously done by humans (e.g., support tickets). In contrast, deeply embedded systems of record (ERP, CRM) are insulated by career-limiting switching costs and the immense challenge of migrating timeless, critical data.

Legacy systems like CRMs will lose their central role. A new, dynamic 'agent layer' will sit above them, interpreting user intent and executing tasks across multiple tools. This layer, which collapses the distance between intent and action, will become the primary place where work gets done.

The lucrative maintenance and migration revenue streams for enterprise SaaS, which constitute up to 90% of software dollars, are under threat. AI agents and new systems are poised to aggressively shrink this market, severely impacting public SaaS companies' incremental revenue.

Instead of interacting with SaaS GUIs (like Greenhouse for hiring), users will interact with AI agents. These agents will directly manipulate the underlying system-of-record data, managing entire workflows from a simple conversation and making the traditional SaaS application redundant.

The hype around individuals building their own apps with AI misses the bigger picture. According to Sierra CEO Bret Taylor, the fundamental shift is from graphical interfaces to conversational agents, which will change software form factors, business models, and user interaction entirely.