Why AI Isn’t Killing SaaS Yet
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This is one of the most dynamic markets we've seen, particularly for buying software, where month over month, you will see large incumbents be replaced by the newcomers. Anthropic just did that with OpenAI, now the most popular model used by businesses according to ramp data. Cursor did that with GitHub Copilot. My main take is that Sasspocalypse as a pronouncement has come way too soon and is typically not informed by actual business behavior.
You're saying that Sasspocalypse is not in the data?
I'd say quantitatively neither aspect of Saaspocalypse is supported by actual business spend. Neither aspect as in it's going to change the way we buy it. Currently, it has not in any meaningful way nor has it killed off at least the companies that are are frequently mentioned.
This episode originally aired on the MTS segment Monetary Matters. For the last two years, the dominant story in software has been that AI will wipe out SaaS companies, collapse seat based pricing, and centralize everything around a handful of frontier model providers. But when you look at actual business spending data, that story becomes much harder to defend. Many of the fastest growing AI companies are not model labs themselves, but the infrastructure, workflow, and application layers forming around them. At the same time, businesses are increasingly using multiple models, becoming more cos
We have the lead economist from Ramp Economics. Ara Karazan, thank you so much for joining us today. Ara
Thank you, guys.
Written you've written a number of pieces looking at this very topic. Are people changing their spending patterns? What are you guys seeing at Ramp?
Yeah. I mean, I think that's what's so important about this kind of work is that, you know, we live in this world, particularly in tech specifically, where everyone wants to make these big pronouncements about where the market's gonna go. Everyone seems like a pundit. No one's really armed with any data to inform them about what's actually happening in the market. So I have this unique job at Ramp where, you know, we see the spend data from 50,000 businesses, a $100,000,000,000 of annual spend. And so we did set out to research what is actually happening in the market. New AI companies are com
not often informed by the actual changes happening with respect to business spend. So it sounds like less has changed than people are talking about. Where would you say the real change is happening? What is changing on the margin?
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