Will AI Kill the SaaS Industry? The Buy vs Build Debate Heats Up

For years, businesses faced a simple question whenever they needed software: should we buy it or build it ourselves? This classic buy vs build debate has shaped the tech world for decades.

But something big has changed. With the rise of Artificial Intelligence (AI), especially tools that can write code and build applications with simple prompts, companies are rethinking their strategies. Suddenly, the idea of creating custom tools in-house doesn’t sound so expensive or time-consuming anymore.

This shift is shaking the foundation of the Software-as-a-Service (SaaS) industry. Once seen as the easy answer for businesses that didn’t want to build their own tools, SaaS companies may now be under serious threat.

So, the big question is: will AI kill the SaaS industry? Let’s break it down.

What is SaaS and Why Has It Been So Popular?

SaaS stands for Software-as-a-Service. Instead of buying a one-time license or building custom software, businesses can simply subscribe to a service and access it online.

Think of tools like:

Google Workspace (Docs, Sheets, Gmail)
Slack (team communication)
HubSpot (marketing and sales)
Zoom (video conferencing)

For years, SaaS has been the go-to solution because:

It’s easy to set up (no need to hire engineers).
It’s affordable upfront (pay monthly instead of huge upfront costs).
It’s scalable (you can add or remove users anytime).

In short, SaaS solved a big problem: it allowed businesses to get modern tools without the hassle of building them from scratch.

Enter AI: The Game-Changer

AI tools like ChatGPT, GitHub Copilot, and other AI coding assistants are changing the rules. What used to take a team of developers weeks to build can now be created in a matter of hours with the help of AI.

For example:

Need a survey tool? AI can generate one for you.
Want a calculator for your business costs? AI can code it quickly.
Looking for a small customer database? AI can create it with simple instructions.

This shift makes building in-house software cheaper, faster, and easier than ever before.

Even OpenAI’s CFO, Sarah Friar, highlighted that AI tools are enabling companies to do more with fewer people. At OpenAI, their finance team is reportedly just 18% the size of what similar companies need, thanks to AI-powered tools.

The Buy vs Build Debate Reignited

Before AI, the decision was often simple:

Buy SaaS if you wanted something fast and reliable.
Build software if you had a big budget, technical expertise, and unique needs.

But now, AI has made “build” far more attractive:

Cost: AI reduces the need for large developer teams.
Speed: What used to take months can now take days.
Customization: Businesses can tailor tools to their exact needs.

This means companies no longer have to depend on one-size-fits-all SaaS products. They can create lean, custom software that fits their operations perfectly.

Will AI Kill the SaaS Industry?

Here’s the honest answer: not entirely, but it will disrupt it massively.

1. Small SaaS Tools Are at Risk

Simple tools like forms, calculators, and task trackers are the easiest to replace with AI-built solutions. Instead of paying a subscription fee, businesses may just generate their own versions using AI.

2. Big SaaS Players Still Have an Edge

Complex platforms like Salesforce or Microsoft 365 won’t disappear overnight. They offer deep integrations, security, and reliability that AI-built tools may not yet match. But even these giants will need to innovate to stay ahead.

3. SaaS Companies Will Need to Adapt

SaaS providers can’t just rely on subscriptions anymore. They may need to:

Offer AI-powered customization within their platforms.
Provide AI assistants to help users build unique features.
Focus on enterprise-level security and compliance, which businesses can’t easily replicate in-house.

In other words, SaaS isn’t dead—but SaaS as we know it will evolve.

Why Businesses Care About AI vs SaaS

The debate isn’t just about software—it’s about money, speed, and control.

Money: Why pay $100 per month for a tool when AI can help you create one for free?
Speed: Instead of waiting for SaaS updates, businesses can instantly build what they need.
Control: Owning your own tools means you control your data, features, and design.

For startups, this could be a game-changer. Lean teams can achieve enterprise-level efficiency without huge budgets.

What Does the Future Look Like?

Here’s how the AI vs SaaS battle may play out:

Hybrid Future: Many companies will use a mix—building small tools with AI while still relying on major SaaS platforms for big, complex needs.
SaaS Reinvention: SaaS companies that embrace AI will thrive. Those that don’t may fade away.
AI-Native Businesses: A new generation of businesses will rise that operate almost entirely on AI-built internal tools, cutting costs and staying agile.

So, will AI kill the SaaS industry? Probably not completely. But it will force SaaS companies to adapt faster than ever. The days of paying high subscription fees for simple tools may be coming to an end.

For businesses, the buy vs build debate is heating up like never before. Thanks to AI, building your own software isn’t just possible—it might soon become the smarter choice.