Why the talking heads are worried
Software investors have had a rough year. On February 3, 2026, software stocks dropped hard and about $285 billion in market value disappeared in two days (Long Angle). By the end of March, the SEG SaaS Index was down 25.7% for the year. Atlassian was down 58%. HubSpot and Workday were both down almost 40%.
The loud voices followed. Mark Cuban said on the TBPN podcast that once you figure out agents, “you can turn that into what would have been a SaaS business in the past” (Yahoo Finance). Chamath Palihapitiya predicted AI will produce “clone after clone” of the tools employees adopt on their own (Yahoo Finance).
There is some truth in the panic. It is just not the truth most headlines are selling.
The moat is thinner than it looked
AI agents have gotten good enough that a capable team can point them at an existing application and rebuild a working version of it. With enough tokens and the right workflow, much of what made a SaaS product hard to copy can be exposed and rebuilt. The screens, the workflows, the reports. Things that took a vendor years to build can now be approximated in weeks.
It is already happening at the edges. In Retool’s 2026 Build vs. Buy survey of 817 builders, 35% said they had replaced at least one SaaS tool with something custom, and 78% expect to build more this year (Retool via Business Wire). That sample leans toward people who already build software, so treat it as a leading signal, not a census. Internal admin tools and workflow automations were first in line.
Most companies will not rebuild their software
Here is where we part ways with the doom crowd. In the short term, we find it unlikely that most corporations will want to rebuild their applications, host them, and manage them.
That work takes internal engineers. Someone has to own the code, patch it, secure it, and answer the phone when it breaks. Most mid-market companies do not have that team, and they are not going to hire one to save on a CRM license.
The value of mature software is also not just the screens. It is years of edge cases, integrations, and compliance work. As one agency put it, “Agents are optimised for efficiency. Enterprises are optimised for resilience” (MarsBased).
What does change: price and patience
Even if few companies rebuild, the fact that they could changes the conversation. That puts cost pressure on SaaS.
Buyers already feel squeezed. Gartner expects software spending to grow 15.2% in 2026, and CIOs are setting aside 9% of their IT budgets just for price increases on what they already own (SaaStr). A buyer who knows a workable alternative can be built has more bargaining power at renewal. Gartner also expects at least 40% of enterprise SaaS spending to move off per-seat pricing by 2030 (The Next Web).
The bigger shift is patience. For twenty years, companies changed their internal workflows to match how the software was configured. That is going to get harder to sell. Companies will be less willing to bend their process to fit a vendor’s defaults when they can see that software can be shaped to fit them.
Expectations around software are going to be much higher.
What this means if you run a business
You do not need to rip out your software stack. You do need to stop accepting “that’s just how the system works” as an answer.
- Use it at renewal. Know what your tools cost per user and what you actually use. Vendors know the alternatives are getting cheaper too.
- Start with the workflow, not the vendor. Decide how the work should run, then ask what the software needs to do to support it.
- Own your data. Whatever you buy or build, your data should be connected, trusted, and yours. That is what lets you switch, extend, or add AI later.
- Build where it is worth it. A focused internal tool can beat a bloated license. A full rebuild of your ERP almost never will.
That last point is where we spend our time at White Tree Solutions. We help companies decide where custom work earns its place and where off-the-shelf software is the right call, and we build capability their own team can own.
Sources
- Long Angle, Software vs. AI Q1 2026: SaaSpocalypse Examined
- Yahoo Finance, Mark Cuban Says AI Is Replacing SaaS (March 26, 2026)
- Yahoo Finance / Benzinga, Chamath Palihapitiya Says AI Agents Will Undermine ‘Bottoms Up’ Software Strategy (August 6, 2026)
- Business Wire, Retool’s 2026 Build vs. Buy Report (February 17, 2026)
- MarsBased, Agents Will Not Kill SaaS: They Will Circumvent It (February 26, 2026)
- SaaStr, Gartner: Enterprise Software Spend Will Grow 15.2% (November 27, 2025)
- The Next Web, AI-native spending surged 94 per cent. Traditional SaaS grew at eight. (May 5, 2026)