There’s a lot of chatter these days about a so-called “SaaSpocalypse” that could have significant consequences for IT services providers. As more organizations embrace artificial intelligence (AI), they are deploying more custom applications created with AI-powered coding tools.
The rise of AI-built applications
Historically, many of those applications would have been developed by an IT services provider. In many cases, that provider would also deliver managed services to maintain and secure the application.
However, if more applications are built by end users with domain expertise, a practice known as vibe coding, there may be fewer opportunities for IT services providers to extend or customize applications such as customer relationship management (CRM) platforms.
At the moment, it’s not clear how widespread this trend will become. A recent Futurum Group survey of 830 global IT decision-makers found that 56 percent of enterprise decision-makers still prefer to build most applications in-house. That figure is virtually unchanged from a year ago, despite the widespread availability of AI coding tools.
At the same time, Starbucks recently revealed plans to build more custom applications. The announcement sent the valuations of software-as-a-service (SaaS) providers tumbling.
Why MSP opportunities may increase
There is little doubt that AI tools will drive an explosion in the number of applications being built and deployed. Many of those applications will still be created by IT services providers.
The bigger question is what percentage of those applications will generate opportunities for managed service providers (MSPs). Many organizations that choose to build custom applications may lack the expertise required to support them. As a result, the number of opportunities for MSPs to provide managed support services could increase.
Supporting citizen-developed applications
The challenge is that applications not built by professional developers can be more difficult to support. Citizen developers who create these applications often lack experience with application architecture and design.
As those applications scale, shortcomings in architecture can make them harder to manage, secure, and maintain. MSPs may increasingly find themselves helping organizations address those challenges.
Ultimately, MSPs may have more to gain than lose in the vibe-coding era, but there could be short-term disruption. Many organizations are so enthusiastic about AI coding tools that leadership teams are encouraging employees to build with AI before increasing reliance on packaged applications.
The future of SaaS in the AI era
Not all SaaS platforms are created equal. Many organizations are also trying to reduce the number of providers they must manage.
There is ongoing debate about the best licensing model for SaaS applications. The issue is becoming more complex as AI agents increasingly act as application users, yet do not fit neatly into traditional per-seat licensing models.
Regardless of how SaaS adoption evolves, the category is unlikely to disappear in the age of AI. What remains unclear is whether all SaaS providers will have the financial strength needed to survive an expected wave of consolidation that could reshape the channel ecosystem.
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