'SaaSpocalypse' Narrative Crumbles: Salesforce and Booking Thrive Amidst AI-Powered Growth

The 'SaaSpocalypse' - a predicted demise of software as a service (SaaS) companies due to AI-driven obsolescence - has been greatly exaggerated. In reality, several companies are thriving in this new environment.

Over $2 trillion in software value was lost over the last year due to premature fears that AI would render many SaaS businesses obsolete. However, a closer look at certain companies reveals that they are well-positioned to become big winners in the long term, with greater profitability and pricing power from AI-driven wins.

Salesforce, for instance, was wrongly predicted to be facing obsolescence by LLM (large language model) companies like OpenAI and Anthropic. These critics claimed that autonomous AI agents would manage customer relationships from beginning to end, relegating Salesforce to being an interchangeable commodity or even redundant. However, data is the new moat, and Salesforce has the most valuable data.

Salesforce has processed over 216 trillion customer records this year alone, and its Agentforce AI agent platform has seen significant growth, with well over 30,000 deals already closed amidst exciting new partnerships. The acquisition of Slack has also become crucial to Salesforce's AI future, providing critical context and human insights.

Booking Holdings was another company that was wrongfully predicted to be facing obsolescence due to AI-powered travel recommendations. However, the company is a differentiated travel transaction platform with a strong competitive moat. Its stock has bounced back to near all-time highs, just like other OTA rivals such as Expedia.