Pricing Pressure
How was your weekend?
Mine was cool, had a couple SaaS vendors send me automated emails saying they were increasing prices significantly, but without any communication about product features they are adding for that extra price.
Now, I get it. Companies raise prices to increase profits without doing any other work. But customers also have a job to manage expenses.
This is the core of the AI Disruption Risk issue stemming from the SaaSpocalypse.
The build vs buy decision has completely changed, especially for marginally valuable enterprise software.
I can build the small features I need in-house and have it integrated natively into my operational systems. Sure there’s a little up front cost, but I was thinking about doing it anyways and shifting the spend to AI product development, which is a growth driver for me.
We see two types of enterprise software firms with all the advisory and product development work we do:
Companies that have not or barely adopted AI-native capabilities that’s dampening growth
Companies that already have an end-to-end, AI-native app that’s driving growth
Companies in that first bucket are obsolete, and became so in the last 6 months. Now that we live in a Power Law Economy, disruptions happen in months instead of years or decades.
I can’t get API access or MCP access to your product so my AI can do the work I want to do through my own AI-native interface. Which means the entire world has boarded a cruise ship traveling to the new world and promised land, but you’re still back on that old island manufacturing buggy whips for your horse-drawn carriages.
As a result, me and other customers, have a no-brainer decision in front of us: we build the small feature in house as part of our normal development operations or we shift the spend to an AI-native provider where my company, completely enabled with AI, can access the tools and outcomes.
We’ve been saying it for years, but I’m just here to tell ya…emerging tech is no longer innovation, it’s table stakes for competing in your market.
—Sean
P.S. What these software providers should have done is sent an email over the weekend to customers that said, “we’ve decreased your prices and are now providing you with these crazy new capabilities”. Then had a CSAT/NPS survey right after. No notes. 10 out of 10.
