SaaSpocalypse: Maybe an Opportunity for Small Software Studios

AI might not replace developers, but it could give small teams a real advantage.
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My podcast app is currently full of episodes discussing how software developers are being replaced by artificial intelligence. It’s not just industry publications covering this topic in countless articles, but also mainstream media is asking whether software developers, as we know them today, will even be needed in the future.

No going back

My working world has changed so rapidly in just the last few months through the use of AI tools that I can no longer imagine a future without AI assistance in the industry. My work is going to change completely — or perhaps that has already happened.

When I talk with colleagues, there's a shared concern that the agency die-off we witnessed over the past year will continue. But this trend isn't limited to small and medium-sized enterprises: the stock prices of corporations offering Software as a Service (SaaS) solutions worldwide are also trending downward, which means that once-successful business models will have to be adapted.

The question technical buyers are asking: 

Why should I keep paying ongoing license fees for software that I could have developed myself with a one-time investment? Of course, a large and comprehensive application needs a great deal of time to mature. But many of its features go unused in practice. At the same time, there's often no way to adapt the software to one's own needs. In some areas, it can therefore be a genuinely realistic and more economically viable decision to build the software quickly and cost-effectively with the help of AI tools.

Bad news or an opportunity?

While this could be bad news for large SaaS providers, it could well be an opportunity for smaller development studios to pursue a new business model. With limited resources, we obviously can't rebuild huge software suites "from scratch," but with the support of coding agents, it's entirely possible to recreate the ten relevant functions that a customer actually uses from that enormous application.

The whole thing could be realized cost-effectively with the help of AI tools by small teams or even individuals, and sold as a standalone product.

In this scenario, not all programmers would be replaced by AI. Rather, AI tools would act as an "enabler" for small teams to become competitive with companies that previously required 100 employees.

A friend of mine who works as a management consultant summed up the situation like this:
“In five years, I won’t need five employees anymore, just two really good ones who understand all areas. We’ll probably achieve the same output as today.”

I share this perspective and believe it applies to many other areas of work.

And what does this mean for young professionals?

These days, companies are growing even without hiring additional staff — precisely because of the increasing market penetration of AI solutions. In the IT sector too, entry-level jobs are increasingly being replaced by AI. On the job market, at any rate, one can observe heightened demand for experienced all-rounders. It remains an open question how we will deal with well-trained career starters in the future, and what the current AI development means for their careers. From my own expertise, I'm convinced that good creative and individual solutions only emerge in diverse teams — young/old, gender identities, backgrounds — that also know how to use AI critically.

Conclusion:

So the current development doesn't necessarily mean that AI will replace all developers. Rather, when used correctly, it can be a productivity boost and enable even small teams and individual developers to build significantly larger and more comprehensive applications. Whether SME or corporation, every provider will need to develop the necessary flexibility to avoid being left behind as digital automation advances at a rapid pace.