Writing this at the start of 2025, I can say with a high degree of certainty that this piece is unlikely to age well, but at least we'll be able to look back and laugh about just how wrong we were.
Jumping right in - why might SaaS be 'dead'?
Death of the Backend
For context, let's restate Microsoft's Satya Nadella's December 2024 assertion that SaaS as we know it is dead:
I think the notion that business applications exist, that's probably where they'll all collapse right in the agent era, because if you think about it, they are essentially CRUD databases with a bunch of business logic. The business logic is all going to these agents and these agents are going to be multi-repo CRUD right, so they're not going to discriminate between what the backend is - they're going to update multiple databases and all the logic will be in the AI tier so to speak. And once the AI tier becomes the place where all the logic is, then people will start replacing the backends.
It's fair to say this interview sent shockwaves through the industry - not because it was the first time anyone had floated the idea that SaaS was moribund, but perhaps because it was such a concrete formulation of how it was going to happen coming from a senior industry player. But combing through the comments on YouTube, reaction videos and subsequent blog posts, it was clear just how polarised opinion was on how this might play out. A lot of experienced engineers refused to countenance the possibility that backend logic could be subsumed by LLMs, exemplified by comments like this: