There are those who claim that AI is going to kill software. Most likely, just the opposite will happen.

It was 1993 and a young man named Marc Andreessenstill with his hair intact and a lot of ambition, set out to create a web browser with a colleague who worked with him at the National Center for Supercomputing Applications (NCSA) at the University of Illinois.

They called it Mosaic.

That browser allowed you to explore the newborn World Wide Web with the click of a mouse, something amazing because to date the browsers that had been developed were in text mode and were used with the keyboard. Suddenly the web could include images and even multimedia content.

A little later Andreessen met Jim Clark, founder of the legendary Silicon Graphics, and he encouraged him to embark on an adventure with his web browser, so together they decided to set up their own startup and that led to the creation of one of the mythical browsers in history: Netscape.

That made Andreessen a multimillionaire, and from 2005 his interest changed. I no longer wanted to start a business, but rather help others start a business. He ended up founding the venture capital firm Andreessen Howoritz and became richer and richer (while losing more and more hair). His successes and bets in the technology industry are notable, but also he left some famous phrases. The most notable is probably the one delivered in 2011 when saying

“Software is eating the world.”

His argument was compelling: the companies that were growing the most were software or had software as one of their key pillars. He was not wrong—today these companies are absolute technological giants—and that quote became one of those seemingly immutable laws.

And then AI arrived.

Is AI eating software?

The appearance in November 2022 of ChatGPT caused an extraordinary impact, although it had been clear for a year and a half that something was changing in the software world. In July 2021 we talked about GitHub Copilot when the conversation around generative AI was still awakening.

That project allowed machines to program for us. This concept has become over the years the clearest example that AI can change things– Developers have embraced this tool like no other industry, but they know that they cannot trust her 100%.

Still, we are living in an exciting time for software. One in which the rise of vibe coding is absolute. Andrej Karphaty I thought about it these days and explained that when coined the term A year ago maybe he was wrong with that way of calling it. Now he proposed changing it to “agent engineering” to reflect the type of tool it has ended up being.

Be that as it may, the vibe coding/agent engineering has sparked a fever for software development. In many ways it has democratized it and turned us all into potential developers.

I am experimenting myself with Open Source tools that I am modifying to my liking, and others are doing exactly the same in this era of “custom micro-applications”. But in recent days we have also experienced a disturbing phenomenon.

The threat of the “SaaSpocalypse”

The generative AI models and AI agents that have appeared in recent months have ended up having an extraordinary impact on the software world. In fact we are not referring to vibe coding as suchmore aimed at occasional programmers or users without knowledge who are encouraged to create their own apps.

We are referring to what has happened to the large software companies that for years have controlled the market with the SaaS (Software as a Service) philosophy.

This model has made it possible to convert, for example, Photoshop or Office no longer into software that was sold in boxes and you installed on your PC, but into applications that run in the cloud and that you can use from a browser. Applications are no longer applications, they are services. And you don’t pay for them by buying them at once: you subscribe to them.

But AI appears to threaten that model. Last week, software companies lost a total of $300 billion on the stock market overnight. The shares of MongoDB, Salesforce, Shopify or Atlassian lost between 15 and 20% in value in a few hours, and talk of the “SaaS apocalypse” began (“SaaSpocalypse“).

These falls are obvious if you take a look at Google Finance or any monitoring platform for these companies. Or if you ask Perplexity like I did, which creates a nice (and worrying) graph about some of the companies consulted: the collapse in the last month is really terrible, although it seems that the trend seems to have stopped.

Be that as it may, this “SaaS apocalypse”, whether it exists or not, raises a question that is precisely in line with what Andreessen said. If software ended up eating the world, Will AI eat software? Will it kill him?

Software is not going to die. Just the opposite

What is happening at the corporate level with these falls has of course to do with AI, but also with the model and philosophy of these companies themselves. Those SaaS platforms that dominate the world They have not stopped abusing their dominant position for years with aggressive price increases and rigid contracts.

We have seen it with companies like Salesforce, whose customers have seen prices rise 35% in the last two years, or the mind-blowing case of Broadcom, whose customers in Europe were facing price increases of 1,500% in your VMware virtualization software licenses.

This has created an ideal breeding ground for clients of these and many other companies with SaaS platforms to look for alternatives, and also look for them in AI. Artificial intelligence is not only offering efficiency, but is giving many customers that “key to the cell” that allows them to escape from their suppliers, who treated them like hostages.

In fact, the current correction in stock market valuations can also be understood as a post-bubble hangover from 2021, when the pandemic boosted all these companies.

We saw it with him cloud repatriation phenomenonand now we are beginning to see it with those clients who change suppliers and even consider creating a custom one thanks to current AI tools. Of course, doing so involves significant risks: putting into production systems in which only AI has intervened is unacceptable today, and there must be a strong human review to evaluate how that software would behave in real environments.

Are we then in danger of AI eating and killing software? It doesn’t seem likely. In fact the opposite seems much more likely. He explained it in a long and detailed article Steven Sinofsky, former Microsoft executive and head of the development of Windows 7 and Windows 8.

Sinofsky explained how in past transitions we had that same feeling. When the PC or electronic commerce arrived there was a radical change, yes, but those processes took decades and continue to transform our daily lives. What is usually predicted as the “end” of a technology ends up being a catalyst that makes it larger and more complex.

Thus, the PC did not kill the mainframe, but rather integrated it and made it grow. Meanwhile, online commerce did not kill the physical store, but rather created multi-channel giants such as Walmart in the US or Amazon globally. With AI, says Sinofsky, there will not be less software, but much more. For a simple reason: it will be necessary to satisfy a demand that has not yet been covered. There are more processes in the world that have not yet been optimized by software than those that have been.

But that won’t eliminate the human programmer in the short term either. AI automates repetitive input tasks, but the future appears to belong to those who pivot to a systems architecture with human supervision where the value will not be in writing the code, but in ensuring its functionality.

That is precisely where experts will be most relevant. Excel didn’t eliminate accountants, it turned them into financial analysts. It seems that AI is posing a similar transition of developers, who are becoming solution architects.

Thus, the “SaaSpocalypse” is not an apocalypse, but a metamorphosis. Software is changing from being a static product controlled by a few to becoming a dynamic and autonomous product. The challenge for developers and companies will not be to sell lines of code or licenses, but rather results and guaranteed autonomy.

Software is not dying. It’s breaking your limits.

There are enormous challenges ahead, of course. To begin with, that of the technical debt of using AI. Vibe coding generates code that works today, but who will maintain it in three years? Those who use these tools often don’t understand the basis of what they deploy, and that can end up being terrible. As Linus Torvalds said recently:

“AI will be a tool, and it will make people more productive. I think vibe coding is great for getting people to start programming. I think (the code it generates) is going to be horrible to maintain… so I don’t think programmers will go away. You’ll still want to have people who know how to maintain the output.”

There is also a critical issue with the data sovereignty and security. If the software is generated and executed by third-party agents (such as those of OpenAI or Anthropic), where is the intellectual property and privacy of corporate data? This issue, together with the energy and hardware needs and the education of the developer of the future, are questions that will undoubtedly influence

Image | Chris Ried