SaaSapocalypse - winners & losers
Understand many software names are oversold on Claude Cowork fears...curious if HF folk have a view on LT winners & losers in this drawdown.
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bump -- i too would like the answers
think Seat-based pricing Co's (ADBE, ZM, DOCU) will struggle as headcount rationalize 30-40% lower. However, outcome/compute/usage based pricing (NOW, SNOW, DDOG) present a compelling case where they can still win, and this drawdown is an attractive entry pt..
curious what others think
NOW is also seat based….
Why couldn’t seat-based tools just push price?
Curious why you think that business model matters more than the use case.
I’m skeptical that Adobe faces a threat from AI agents. I think it is more likely that they will integrate AI into their products. I agree this will probably lead to a reduction in seat count, but Adobe can offset that through increased pricing
Depends on comp product pricing, but if your customers are leaving/are on the fence about leaving your product you can’t expect someone to jack up pricing to cover up losses.. that works if you have a sticky base of customers but if you’re talking about 30-40% reduction, someone has to give on either pricing/length of contract to win back or incentivize ppl to not leave.
duh why don't the software companies simply incresae their prices? why didn't they think of that?
Lots of companies are moving to value-based or consumption-based pricing. The idea is that a lot of these seat-based players are providing agentic AI solutions that are in-part leading to the replacement for headcount and these software providers want to be compensated for it. Pretty wide-spread trend that isn't leading to as much retention loss as you would think (a lot of these businesses are still at 90%+ gross retention) as it aligns incentives much better. Again speaks to the idea that there will be winners and losers among the current SaaS world; whereas some industries will be completely disrupted by AI-first players and others will be able to adapt / benefit from AI through using AI to increase their value-prop to customers / cross-sell.
bump
I like the term "Vibe-Code Red"
use fintech as a proxy for how low this will go
Can you elaborate here? Where did these fintech companies bottom? Did they ever bounce back?
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