Unlike most articles that butcher an analogy so badly that you wish they could have just described the concept plainly, this one uses the analogy really well. It carries it from start to finish without overstretching it.

This line captures the essence of the article and is going to stick with me forever:

> SaaS is the bread, not the bread machine.

And yes, SaaS companies that understand that they sell convenience and accountability will be the ones that survive this AI rush. New ones could emerge too.

This is one of the best articles I've seen come across HN lately. You presented a well structured argument, and one I strongly believe in.

I had a conversation with someone the other day, trying to convince them how easy it would be to solve a problem they had by creating a quick program with Claude. They were so computer averse, so used to thinking that coding was some impossible task, that they refused to even try or let me show them.

SaaS isn't dead at all. In fact, I think we may have just entered the golden age

> "the sound of scared SAAS companies screeching in the distance"

Naw, I can see I think the case being made - a lot of people still do things they don't need to, well after they don't need to do them, so SAAS may have a place for a while

I think for the rest of us though, SAAS may want to "pivot" to something else...

I completely agree that people are vastly undervaluing convenience, reliability and SaaS being essentially a great way to make something “someone else’s problem”.

The count argument would be that building with AI will potentially give you infinite customizability, which is especially attractive if you’ve ever hit a brick wall using a line-of-business SaaS product. It works great until you hit that wall.

But again, I think this counter argument oversells the value of customization. Most users-would-be-builders would happily build a monstrosity that doesn’t even serve themselves well, if you let them. Building good workflows (and therefore good SaaS products) is not nearly as easy or straightforward as it seems.

This went straight from medieval guilds to the 1920s, but actual bread mass production started in the Victorian era, and people did have a big negative reaction to that. They adulterated bread in ways that poisoned consumers during that period, which was a tad unpopular.

That drove consumers to some curious brands: https://en.wikipedia.org/wiki/Aerated_Bread_Company

Convenience is often more important than the traditional price vs quality tradeoff. Water is free. The convenience of bottled water is worth a lot. Apple's "it just works" was marketing gold that recognised the importance of convenience relative to price and performance (something many, many 'computer enthusiasts' never understood).

SaaS will survive. We pay a lot for convenience. You'll never go wrong appealing to laziness ;)

The threat to SaaS is moreso consolidation than AI. Since people value convenience more than anything, having more functionality in one service rather than multiple services will win. For example GitHub integrating more and more code scanning/security functionality rather than having a separate service like Snyk for that.

What an excellent read. It absolutely nails the "why aren't everybody writing software now" question.

Good article. Appreciate the bread (machine) analogy.

One thing to add: software maintenance costs. The build has never been the bottleneck.

The notion that most companies will suddenly institute developers to build all kinds of software inhouse and maintain it is silly. Most companies are not google et al, even in 2026.

The insurance industry built almost everything custom in the 70s and 80s, simply because that was the only option. The more software became commercially available elsewhere the more this effort was pruned back.

Another thing: knowing what to build — another big bottleneck. Most people cannot articulate what they want and even fewer can articulate it at a level that would enable them to build durable software, even with AI. Case in point: the majority of AI-built stuff you see are point solutions or small productivity items, etc. “Systems thinking”, as some people call it, is hard, even for most software engineers.

Yes, you can “rebuild” tools you’ve previously purchased as SaaS but at some point you gotto use your brain to come up with something new. Systems thinking on blank-page challenges is even harder…

Convenience is the single greatest drug of our species, for better and worse.

Great points. Convenience comes first, especially for things not in your core product offerings.

The math has changed for sure, but there is still a large open space in the convenience vs cost equation.

The bread analogy is more corrct that they let on. The whole article without the C word.

Saas isn't doomed, but it is going to be Commoditized. so you win on price, volume, execution, and cannot simply sell user seats to scale.

I would disagree, but before let me acknowledge how well written article is and bread analogy is spot on. However, author complete discounted open source and ability to spin up open source software that will replicate almost 1:1 what SaaS offers without a pay-to-access requirement. Why spend thousands on integration with SaaS that you can take open source, vibe code missing features and start using? You say maintenance, but I'd argue that owning your data is more important that costs of maintenance. Like bread, when you learn and have ability to choose healthier product you never go back to store brought.

The risk for SaaS isn't that customers will build their own but that the barrier to entry for competitors is lower.

The Chorleywood process created mega bakeries that displaced regular bakeries because they changed the economics. AI is doing the same and fundamentally changing the economics of production. What used to take years and huge teams to build can be built by much smaller teams much faster.

SaaS isn't going to sublimate straight into consumer built tools but the boiling point for competition has gotten a lot lower.

Great article. This last year I've been travelling around and have met 2 people running very lucrative vibe coding agencies. They vibe code websites and apps on behalf of people for whom writing prompts is too much mental overhead.

All these arguments ignore that the bread you buy today is not always the bread you’ll get years from now.

Don’t we all know the cycle by now?

1. Company pours money and resources to create good product

2. Good product gets customers and those customers use word of mouth to get product viral and even more customers

3. Eventually the company has to make a profit and in that pursuit, they make the product worse by adding ads, adding paywalls, forcing login or subscription service, dark patterns

I’ve seen it happen with so many products I used that I only use open-source now. And if the feature is small, I just build it myself. In your bread example, open-source is the ultimate cookbook and chefs who understand that cookbook can out cook the best chefs out there.

My guess is that SaaS will be around, but it's going to look really different.

Say there's a company that sells you a subscription to an issue tracker. At first, it looks just like any other web-based issue tracker. But, although you won't realize it at first, it's hosted on a Linux VM with a development environment on it. Each customer's app gets built from source.

Then, when you want something changed, you send a message to support. And they just bounce it to a coding agent that edits the source code and rebuilds it.

The sort of customization that enterprises used to pay big bucks for is going to get dramatically cheaper.

(There are technical issues making this safe, but I think they'll be solved.)

SaaS partially took the place of bespoke projects that people were doing before. They never stopped doing those of course and there were also off the shelf packages that people bought before SaaS.

AI lowers the cost of creating bespoke software that competes with both. Instead of buying a one size fits all thing that half does what you need, you can now have a thing that is a bit better suited to your needs. There will be a lot more demand for those things. A lot of these things are going to require deep domain knowledge and some system thinking skills.

This is still hard enough to do well that a lot of the creation work will be outsourced to professionals. Even if that involves the use of AI prompting. Maybe after naive attempts to do it in house fail. My hunch is that there will be a lot of growth for those that can do these types of projects efficiently and that it might more than offset the job losses in the SaaS sector.

There are a lot of of companies that are still under using software. There never was any good SaaS that fit their needs and they lacked the skills to do it themselves. When you lower the cost of something (creating software) the market usually grows. A lot of things that were previously not feasible are now doable.

I was building an in-house infra management platform (including a self hosted AI agent) for companies in a segment that's very careful about its internal IP.

I spoke to the CTO of a well funded company who was spending a few millions on AWS infrastructure per year with budget overshoots etc. I pitched the product to him with all the details and he understood it but at the end of the day, his response was that he'd rather pay AWS for the convenience rather than manage this by himself.

Many such examples with variations

- browser extensions where a bookmarklet will do (media speed control)

- tolerate-able UX where alternatives available (e.g LLM chat interface without a table of contents is a pain to me, vibe coding an extension took me less than 1 session worth of credit)

- buying bulk vs buying individually

- doomscrolling vs reading a book

- standing vs tip toeing (one I discovered only very recently that I can tip toe any time to train my toes for climbing, no need dedicated training sessions)

- getting angry/depressed online vs realising most thing on internet is about provoking emotion