Snowflake's CEO warns that traditional software firms with walled-garden data models are vulnerable. If they don't develop their own compelling agentic interfaces, they risk being reduced to mere data sources for dominant AI platforms, losing their customer relationship and pricing power.
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The rise of agentic coding is creating a "SaaSpocalypse." These agents can migrate data, learn different workflows, and handle integrations, which undermines the core moats of SaaS companies: data switching costs, workflow lock-in, and integration complexity. This makes the high gross margins of SaaS businesses a prime target for disruption.
In an AI-driven ecosystem, data and content need to be fluidly accessible to various systems and agents. Any SaaS platform that feels like a "walled garden," locking content away, will be rejected by power users. The winning platforms will prioritize open, interoperable access to user data.
The value in software is shifting from SaaS platforms (like CRMs) to the AI agent layer that automates work on top of them. This will turn established SaaS companies into simple data repositories, or "hooks," diminishing their stickiness and pricing power as agents can easily migrate data.
The ability for AI agents to access and operate on a SaaS platform's data is becoming critical. Companies that lock down their data risk being isolated, while those with open data APIs will become part of the new AI ecosystem, even if it means ceding the primary 'workspace' layer.
The core conflict in AI is over who owns the user interface. Model makers like OpenAI aim for a universal 'big brain' agent that consumes data, while data platforms like Snowflake are building specialized agents on top of their proprietary data to avoid becoming commoditized data pipes.
The traditional SaaS model of locking customer data within a proprietary ecosystem is dying. Workday's move to integrate with Snowflake exemplifies the shift. The future value for SaaS companies lies in building powerful AI agents that operate on open, centralized data platforms, not in being the system of record.
With AI agents in platforms like ChatGPT becoming the primary work surface, the traditional SaaS moat of owning the user interface is eroding. The most defensible position will be owning the core data as the "system of record," making the SaaS platform an essential backend database.
Value in the AI stack will concentrate at the infrastructure layer (e.g., chips) and the horizontal application layer. The "middle layer" of vertical SaaS companies, whose value is primarily encoded business logic, is at risk of being commoditized by powerful, general AI agents.
SaaS products like Salesforce won't be easily ripped out. The real danger is that new AI agents will operate across all SaaS tools, becoming the primary user interface and capturing the next wave of value. This relegates existing SaaS platforms to a lower, less valuable infrastructure layer.
Traditional SaaS platforms derive value from their UI over a database. AI's primary threat is its ability to create personalized UIs and automate workflows on top of any database, rendering expensive, one-size-fits-all SaaS interfaces obsolete. The software becomes a commoditized backend.