Tech Leaders Debate Future of SaaS Amid AI Evolution

The future of the software-as-a-service (SaaS) industry was a focal point of discussion at the tenth annual SAAS NORTH conference held in Canada’s capital. As tech leaders gathered to share insights, they debated whether the model is facing a decline or if it might be revitalized by the rise of artificial intelligence (AI). The discussions came just hours before a key confidence vote on the 2025 budget, highlighting the urgency and relevance of the topic.

Evan Solomon, Canada’s Minister of Artificial Intelligence, delivered a keynote address that resonated with many attendees. He described the current era as the “age of the entrepreneur,” likening it to a “Gutenberg moment,” where the barriers to building software have significantly diminished. “It has never been easier to have an idea and to execute that idea,” Solomon stated. Yet, this newfound accessibility raises challenges for entrepreneurs. With so many individuals able to launch businesses, how can any one venture stand out?

Throughout the event, founders, investors, and industry leaders reflected on the evolving landscape of SaaS and the implications of AI. Vitaly Pecherskiy, co-founder and CEO of StackAdapt, shared his experiences from the company’s early days in the 2010s. His adtech platform now boasts an impressive annual revenue of $500 million and a valuation of $2.5 billion, all while raising less than $5 million in funding. Pecherskiy noted a significant shift in how startups approach funding, emphasizing that many now prefer to bootstrap and gain traction organically, a strategy that was less viable in the past.

Shifting Definitions: From SaaS to RaaS

The emergence of generative AI has transformed traditional SaaS calculations. Instead of focusing on annual recurring revenue (ARR), many companies are now prioritizing monthly revenue metrics. This transition has allowed new entrants, such as Lovable, an AI-powered app builder, to achieve remarkable revenue figures within a short timeframe. During his keynote, Michael Litt, co-founder of Vidyard and Garage Capital, declared, “SaaS has become increasingly competitive as the barrier to building software has dropped.” His assertion that the conventional SaaS model is effectively “dead” sparked considerable discussion.

Litt introduced the concept of “results as a service” (RaaS), advocating for a shift toward software that delivers measurable outcomes rather than merely providing tools. As competition intensifies, he argued that customers now demand proof of return on investment, stating, “Renewals now demand proof of [return on invested capital]; I’m not just going to buy software from you anymore, I’m going to buy results.” This perspective underscores the need for founders to create products that directly impact their customers’ bottom lines.

OpenText, once a quintessential SaaS company, has pivoted to prioritize AI outcomes. Shannon Bell, the company’s Chief Digital Officer, highlighted the necessity of focusing on meaningful business results. “The technology is there, and everyone loves cool technology, but it doesn’t need to be a party trick,” Bell remarked during a fireside chat. OpenText has integrated numerous AI agents into its operations, demonstrating the potential for AI to drive efficiency and performance.

Finding Value in a New Landscape

While some leaders advocate for entirely replacing the SaaS model, others see potential in refining it. Daniel Wigdor, head of AXL Market, cautioned against a simplistic replacement mentality. He urged attendees to focus on building innovative solutions that leverage existing platforms rather than completely overhauling them. “The only reason people are looking at these [AI] platforms and saying ‘that’s the future’ is because people have not yet applied their imagination,” Wigdor said.

In a panel discussion, Bridgit founder Mallorie Brodie expressed her belief in the enduring relevance of SaaS, particularly in traditional sectors such as construction and agriculture. She noted, “There is still so much opportunity in those spaces for basic workflow software that doesn’t exist.” Brodie’s perspective reinforces the idea that while the landscape is changing, there remains a significant demand for foundational software solutions.

The discussions at SAAS NORTH reflect a broader reckoning within the tech industry regarding the future of SaaS in an age dominated by AI. As the landscape evolves, industry leaders acknowledge the need for continuous adaptation. Pecherskiy concluded with a call for innovation, emphasizing the importance of experimenting and finding new opportunities. “Just because something is working, it’s not enough to just say, ‘Oh, it’s going to continue working forever,’” he warned.

The ongoing dialogue at SAAS NORTH illustrates the dynamic nature of the tech industry, where the rise of AI presents both challenges and opportunities for entrepreneurs. As the conference concluded, it was clear that the fate of SaaS is not yet sealed; rather, it is in a state of transformation that could lead to new avenues for growth and innovation.