AI eating SaaS Applications

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Today’s newsletter:

• Intelligent Pipeline Application

• SAAS Downfall

• Trends

Intelligent Pipeline Application

An intelligent pipeline is the lifeblood of a sales team. It’s a process of attracting leads and converting them into customers. AI will automate many parts of this pipeline. Companies like Clay are automating lead generation for their clients. As these outbound leads are given to Clay’s clients their messages would be written by AI as they contact their newly found leads.

Many small software companies find leads for particular niches. One of the most popular is for Real Estate Agents.

Why it matters?

Salesforce’s entire business is about managing customer relations and if other AI companies can make cheaper tools and provide more value then Salesforce’s business will suffer. Salesforce was a 400 billion dollar company before AI started to hurt its stock. This would be horrible for other SaaS companies such as Workday and ServiceNow.

SaaS Downfall

Recently, Klarna announced that they are canceling subscriptions from SaaS providers such as Workday and Salesforce.  Many experts are denying that SaaS won’t be eaten by AI, but they are wrong. Since enterprises pay a hefty amount per seat for software they need to cut costs to invest in generative AI. Moreover, AI has made creating software easier and faster thus more companies are building in-house.

Salesforce stock rose due to the announcement of Agentforce, which allows its customers to create agents with high accuracy and leads to more automated tasks for them. This may help save Salesforce, but it highlights the trend of AI eating up SaaS if one of the biggest SaaS companies is pivoting to AI agents.

Why it matters:

Software has impacted every industry in the world including travel, taxi, and video games. Now AI will be embedded into every sector and it is happening faster than any other technology.

Upcoming Trends to watch out for

• LLMs almost hit stage 2: In less than 2 years, we have almost reached stage 2 of OpenAI’s scale of tracking progress towards AGI

• The god model is far away: o1 isn’t better than GPT-4o in everything hence users will have to choose which model to use for their task. Making AGI or a god model far away

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