Exactly right. Here’s my case that AI is actually lifting the SaaS boat, even as it clearly cannibalizes some of the market: The “SaaSpocalypse” thesis is backwards. @Stripe currently shows U.S. AI spending growing 91% YoY. Yet its non-AI SaaS index is also growing at a rapid >30%. AI is far from draining the software economy and is actually expanding it. But AI spend is also growing at roughly 3× the rate of SaaS, so the mix is in the midst of changing vigorously. The corresponding earnings data also rhymes. @Microsoft M365 commercial cloud grew 14% while seats grew just 6%, with 30M+ paid Copilot seats. @Workday says AI already drives >25% of new ACV. @Salesforce Agentforce ARR is a whopping +240% YoY. @ServiceNow subscription revenue is robust +24.5% while AI crossed $1B ACV. My conclusion: AI is lifting all the software boats, for now (though this could, and is likely to change in coming years.) But right now, it is creating new budget before it destroys old budget. Large platforms are converting AI into higher ARPU, consumption and new workloads, weaker point solutions will face the squeeze first. The SaaSpocalypse does not herald a software spending recession. Instead, it will arrive as a partial transfer of overall growth, from seats -> intelligence.

Yes, I think that’s right. Professional services and management consultancies have to have some kind differentiated IP they can uniquely deploy via AI. They’ve tried for years to do this and now their survival depends on it. We will see.