One of my favorite Besties, David Friedberg, CEO of the Production Board and co-host of the All in Podcast called for a bear case in Vertical SaaS for 2024. I thought this was a crazy prediction. Especially from someone that doesn’t talk much about the SaaS industry that much anyway on the show.

He attributes the decline of Vertical SaaS to the emergence of low-code tooling and AI Co-Pilots. These advancements enable businesses to create tailored platforms without relying on off-the-shelf solutions from Vertical SaaS providers. Many larger enterprises rely on more than 15 SaaS programs to streamline their workflow, which can result in significant annual expenses amounting to thousands of dollars.

The idea that someone can create their own workflow with custom software is an interesting one no doubt. The emergence of low code technology and AI co-pilots is a trend that isn’t going anywhere. If we take this further you can see a world where there is no out of the box software. Everyone has the ability to create their own applications as easy as moving around images in the movie Minority Report.

My main concern with this theory is that software development entails more than just coding and design. It also requires a deep understanding of user experience in relation to the product, encompassing factors like usability, accessibility, and user satisfaction. These are highly specialized skills that may prove challenging to replicate and fully grasp in a hospital environment, where the focus is primarily on patient care and medical expertise. Therefore, it is crucial to acknowledge the complexity and multidimensional nature of software development when considering its application in non-traditional industries.

My prediction is that the event forecasted won’t occur in 2024. The impact of replacing out-of-the-box software will be felt not only by vertical SaaS companies but all SaaS companies. In my opinion, the technology hasn’t reached that level of advancement yet.