There’s an 80% chance you may be living under a rock if you haven’t heard of the grand debate on whether or not AI agents will kick the software-as-a-service (SaaS) model to the curb.
Late last year, Microsoft chairman and CEO Satya Nadella shook the industry to its core when he made remarks on tech industry podcast Bg² forecasting a blunt reality about the future of the SaaS model.
“The business logic is all going to these agents, and these agents are going to be multi-repo CRUD, right? So, they’re not going to discriminate between what the back-end is. They are going to update multiple databases and all the logic will be in the AI tier, so to speak,” Nadella said in one portion of the over hour-long podcast episode. “Once the AI tier becomes the place where all the logic is, then people will start replacing the back ends.”
Nadella added that the tech behemoth will move to “aggressively” collapse its own back-end as consumers seek more AI-native business applications.
Say it ain’t so. However, some industry experts have raised eyebrows at the CEO’s implied prediction for the future of SaaS. James Evans, director of product at Amplitude, a digital analytics platform company, told IT Brew that he doesn’t envision a “binary shift” to a sole reliance on agents and noted there are only a few tools that he can see being “cleanly compressed” into them. Instead, he foresees change coming on the software side to accommodate the emergence of agents.
“The software that people use will have to adapt to be more of a control center for utilizing these agents, inspecting how they’re working, giving them feedback, things like that,” he said.
Top insights for IT pros
From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.
David Brauchler, technical director and head of AI and ML security at NCC Group, told us that he actually sees an enhanced future for SaaS and forecasts a rise in the integration of agents and SaaS tools.
“As SaaS platforms are adding plug-ins, functionalities, and other interfaces to integrate with these agents, I think that rather than killing SaaS, we’re going to see AI agents make SaaS more powerful and more useful for users,” Brauchler said.
Derek Holt, CEO at Digital.ai, an AI-powered DevOps platform company, said the debate is a case of when the industry “overestimates” the near term and “underestimates” the long-term.
“There are a fair number of business applications today that are basically a database with a very simple UI on top of them and I think those are very likely ripe for agentic models where we’re interacting in different ways,” Holt said. “On the other hand, there are a large set of very mission-critical business applications that have dependencies on compliance and regulation and built in business logic and others and I think those are going to take a lot longer to disrupt.”
Agents-as-a-service. Whether agents-as-a-service will be a new reality down the line is still up in the air according to industry experts. Praneal Narayan, senior director of partner and customer marketing at SnapLogic, told us that the service model is still evolving, but said that it could pose as attractive to small and medium-sized businesses. Holt, on the other hand, remains skeptical.
“It feels a bit more like a marketing term to me than it does a technology term,” Holt said.