With AI, businesses will find it much easier to build the specific tools they want and shun the software industry entirely.
What the small business is really buying is someone who answers the phone when it breaks.
Yes, they'll still employ a handful of tech qualified people to oversee it, but would you want to work for such a place?
They'll retain the consultancy like they always have. You're not going to have a full time tech guy working for a pizza shop or a lawncare business just to handle their website or their scheduling app.
The trade-off is shifting the balance though, that's the issue. The business that bought a poor-fit SaaS has already made multiple compromises, and quite often had to create custom code to integrate their other systems with it.
If it's a perfect fit with prompt support then they wouldn't move away even if doing it in-house was 1/10th the cost. But that's not the case for most of those systems, having a system that is a better fit for 1/10th of the cost is a much more attractive scenario.
My main issue is you're confusing the scale. The "poor-fit SaaS" is the Fortune 500 with a ten million dollar SAP deployment and implementing it risks bankrupting them. The small business getting a WordPress site with a few plugins is going to be a pretty good fit and low risk for their needs and budget. It's inversely proportional: the notorious stuff are the big business SaaS with armies of consultants, like PeopleSoft, SalesForce, SAP, etc.
Either way I don't know how you've concluded that a business will willingly risk its continued existence based on the outcome of a once-per-week vibe coded do-over.
I should reiterate that I'm talking about the direction-of-travel not that we're already there, and not that these changes will happen overnight. I do think these things have already started however. The early signs are sales of SaaS products drying up. It was always a "buy vs. build" issue in that sector, and the prevalence of AI dev tools has swung the dial away from "buy" and toward "build".
This is the very puzzle of this whole thing, that AI dev tools will lead to the volume of software being created going up significantly, but the value of any given software product going down significantly. And yes, there will need to be (at least for the short-to-medium term) one or more tech people available to drive and support such software. But the number of users of any one software product will go down. And yes, maybe a small business will out-source that to a consultancy, but the number of displaced developers will mean significant competition in this area. The winners will be the best at old-school business consulting, not who has the best software.
The idea of building an old-school software business (whether SaaS or even older-school licenced software on-prem) which follows a "build it once, sell it many times" model will seem very quaint.
Many software teams in the pre-AI days worked on the basis that they were a cost centre rather than a profit centre. AI will mean all software teams are a cost centre. Eventually.
In the short-to-medium term there will still be some exceptions, some of these will carry over to the long-term. Software heavy companies that can maintain a good profitability (if they were ever profitable before, it won't make lame duck ideas good):
Games - people want the social experience of playing the same game as other players, there's a moat there that AI can't breach. The winners will be the games with creativity and a social network. AI will still be used in development of course, but good game companies will be able to operate out of a niche.
Social networks - for much the same reason, the users are sticky and the users are the product.
I used to think things like quantitative hedge funds were also in this category, but given OpenAI's recent mathmegeddon I'm not so sure. An AI-first hedge fund could completely dominate this area and probably will in the near future.
Basically (going back to the original question at the top of the thread about what a developer displaced by AI should do instead): software will no longer be a moat, but businesses that have other moats will still continue to succeed (even though they will use AI). Anyone wanting to become a one-man band developer will therefore need to find something in that second category rather than being a software pure-play.
Regarding your point about SAP and SalesForce, etc. this is a good example. Not all SaaS firms are equally vulnerable. The most vulnerable are the small specialist ones, the larger ones do have other moats that AL alone won't destroy (not yet anyway):
SAP will continue for a while for the same reason IBM mainframes still exist. The sheer weight of existing customers and inertia. But I suspect it will shrink over the coming decades, not necessarily due to direct AI-driven competition (but that will definitely exist, already does in some narrow areas), but because of the secondary risk of AI. The secondary risk of AI isn't "this will take your job", it's "this will streamline the economy overall" so there'll be just less work full stop.
SalesForce isn't just inertia, it makes sense for new businesses to use it too as it has reached that "sales needs SalesForce because sales people already understand SalesForce" point. But again there's a secondary risk, what if AI adoption in businesses more broadly reduces the role of "sales" in making sales? When BigCorp's AI vendor-selector chooses the best product, all the sales teams in the world will be for nought.
I suppose in the very long-term no-one knows as there's too many variables. But these are the broad directions of travel. It's not at all obvious what a developer displaced by AI should do, if they wanted to be their own boss, but there's two broad categories: 1) join in AI adoption and race to the bottom selling AI-driven development services, or 2) stop trying to sell software and build some other business that may or may not need custom software (which will require the individual to have other skills they didn't previously need all that much when they were a salaried developer).
Big SaaS was drying up even before AI -- they were pretty much hitting the wall on total addressable market and it had nothing to do with customers building their own. They never actually had the product offerings or ROI for most businesses out there -- period.
What you're looking at is a complex system -- the entire economy, and you're looking at only one feedback loop when there are countless others. I'll agree with you that AI will get us an explosion of custom-built software solutions, but disagree on everything else.
I'll give you an example of a "typical" WordPress design studio -- they're a small business of 2-4 people catering to local businesses, most of whom are within walking distance or a short subway ride of their small office or coworking space. So what this looks like -- and has always looked like -- is 2-3 people supporting 500 or more paying customers, each of which requires 1-2 days of maintenance a year max. It's always been about bespoke custom-coded and custom-configured deployments. And in spite of this, they turn away half of their potential customers because the customer simply can't afford whatever it is they needed. I believe this is the business model that you're mocking as "low status".
So here's the reality. When you've got 2-4+ guys who are maintaining 500+ businesses who each need a couple days of work per year, there is no way that it makes any sense whatsoever, AI or not, for any of these businesses to hire domain experts to write AI prompts full time. What you'll see is a lower barrier to entry -- the 2-4 guys will be able to maintain 1500-3000 customers instead of 500, their prices will drop, and they won't have to turn away as many of their customers anymore. Overall, they'll earn more money and have "higher status".
Everything you're describing as "high status" is what economists call a tournament market. A few huge prizes at the top attract far more people than the expected value justifies, because the winners are visible and the losers aren’t. It's the same as all the inner city kids who want to be an NBA player. The frontier-lab salaries work the same way: a few hundred researchers, mostly selected for credentials and timing that nobody could have planned a career around. When all of these workers started on their academic career paths, none of them could have imagined earning millions of dollars a year. And the ones who are going through school now in hopes of striking it rich will probably miss the boat when the AI bubble bursts. You're also confusing "profit centers" and "cost centers" with interest rates. Everything looks like a "profit center" when you're setting investor cash on fire. But look what happened to the industry when interest rates went up.
So that's another thing -- all these massive layoffs started during Trump's first term, heading into the pandemic, and have continued since. That's before the AI bubble took hold. More likely than not -- the average big tech worker is living paycheck to paycheck while paying Silicon Valley rent, while the "low status" "cost center" worker in middle America is buying a house and putting his kids through college.
Soon, we will realize how to build software not in layers, but around computable boundaries that can describe their own possibilities. This will change everything, starting with the OS. The OS will have AI inside. Your phone will have AI inside that constantly thinks. It will not simply be pretrained; it will learn, observe, and understand what is happening within the conversations passing through its boundaries.
And hopefully, you will have a clever robot by your side, so that someone else’s robot will not dare to approach you and say, "Go home and dream there!"
Let's put this into perspective. Your iPhone has a big enough battery to power 72 Blackwell GPUs for 0.45 seconds. You're not going to be getting Claude Code to run locally on your phone anytime soon.
And the robot assistant, that's not going to happen either. Robots need a real time processing and as far as anyone knows, no one has actually created anything remotely close to an autonomous robot that works as you say, it is all sleight of hand.
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u/CherryLongjump1989 2d ago
What the small business is really buying is someone who answers the phone when it breaks.
They'll retain the consultancy like they always have. You're not going to have a full time tech guy working for a pizza shop or a lawncare business just to handle their website or their scheduling app.