Agentic AI 'breaks the traditional SaaS seat licensing model' – now it’s up to vendors to ditch 'legacy dashboards' and build with agents in mind
Incumbent software vendors will need to work harder than ever to compete with agile, AI-focused disruptors
The SaaS industry is facing a pending wave of disruption as enterprises shift their focus towards agentic AI solutions, according to new research from Gartner.
With agentic AI adoption continuing at pace globally, the research firm said this poses a significant threat to traditional software revenue models.
Indeed, up to $234 billion of application spending will be exposed to "agentic arbitrage" – where agents render some services obsolete by removing the need to work across multiple interfaces – by 2030.
George Brocklehurst, managing vice president at Gartner, said the study shows agentic AI “changes the economics of software”.
“Agentic systems deliver outcomes directly, bypassing traditional user experience (UX)-heavy applications and making the software invisible,” he said. “This breaks the link between user growth and revenue growth for many enterprise software vendors.”
No ‘SaaSpocalypse’, but a ‘metamorphosis’
Long-term, Gartner noted that this agentic AI-focused shift will “refactor” how software is built, priced, and consumed. Indeed, Brocklehurst said a period of “redefinition” could come, with the firm describing this transformation as a "metamorphosis".
“This metamorphosis represents threats and opportunities for both incumbents and new challengers,” Gartner said.
Gartner’s claims regarding a period of transformation for the SaaS space align closely with predictions made by industry stakeholders on the potential impact of AI.
Earlier this year, software stocks plummeted amid a mass sell-off due to the arrival of powerful new AI solutions, particularly Anthropic’s Claude Cowork service.
This spooked investors, with some concerned about a ‘SaaSpocalypse’ whereby agents could remove the need for certain software services.
Despite lingering concerns, some industry leaders are still bullish on the future of SaaS – albeit with a few caveats. As ITPro reported in February, AWS CEO Matt Garman poured cold water on the prospect of a looming SaaSpocalypse, suggesting that “much of the fear is overblown.”
Staying competitive
Remaining competitive in a changing market will require incumbent software vendors to “move from interfaced-based value to outcome-based value,” according to Gartner.
Put simply, providers will need to embed agentic capabilities within their offerings to defend their position and meet changing expectations.
Enterprises don’t want disparate tools and dashboards anymore, the researchers claimed, they want streamlined, end-to-end workflow automation and solutions that “capture customer context and knowledge”.
“As organizations increasingly use agentic AI systems, the user interface is no longer a differentiation,” Brocklehurst said. “Legacy SaaS market share will be cannibalized by incumbents and taken by new entrants delivering horizontal agentic platforms.”
“While this shift is posing an existential threat for vendors who are defending legacy dashboards and seat-based models, it creates a substantial revenue opportunity for vendors who are enabling and developing services and platforms to support agentic enabled cross-domain workflows,” he added.
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