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AIPROPX ReportFortune · 2h ago
The SaaSpocalypse that wasn’t – how Salesforce, Booking and IBM are thriving with AI
The apocryphal quip attributed to Mark Twain, “the rumors of my death are greatly exaggerated,” rings true for certain companies in the software space amidst widespread but premature fears of AI-driven obsolescence.
Over the last year, approximately $2 trillion in software value has been torched on fears that AI will render many software businesses obsolete in the years ahead, in what has become known as the “SaaSpocalpyse,” prematurely announcing the death of the software as a service (SaaS) sector.
The original SaaSpocalpyse thesis of “death,” or at least massive disruption, was how bears were thinking in the early part of the year, but that bearish thesis has now morphed into a less drastic, but still incorrect, theme of how software companies will have to pay more for customer acquisition moving forward with far less pricing power, compressing margins and hindering profitability.
Just as the classic 1979 Francis Ford Coppola film Apocalypse Now was based on a fictional delirium, so, perhaps is the SaasSpocalyse now.
Yes: there is no question that many high-flying technology winners will be under increasing competitive threat from autonomous AI agents moving forward, and the list of companies that look vulnerable is a long one.
At the same time, the panicked investor stampede to the exits across software firms has wrongly punished several of the clearest beneficiaries from AI as if they were obvious casualties. Three examples – Salesforce , Booking Holdings, and IBM – illustrate how, contrary to short-term market fears, there are certain software companies well positioned to become big AI winners in the long term, with greater profitability and pricing power from AI-driven wins, not less.
Salesforce
The misleading bearish AI scenario has an appealing simplicity for some anxious analysts.
Salesforce, the leading customer relationship management (CRM) system, was wrongly predicted to be facing obsolescence by LLM companies like OpenAI and Anthropic, whose autonomous AI agents would presumably manage customer relationships from beginning to end. This led misinformed critics to demote Salesforce from its robust position as the central command center of a business to that of merely a passive database sitting in the background that agents occasionally query. The erroneous presumption was that the AI models would capture all the value, and Salesforce would be relegated to being an interchangeable commodity if not entirely redundant. Down roughly 20% this year and 40% from its high, the stock has been priced for precisely that faulty diagnosis.
These confused critics read the dynamic backwards. Salesforce isn’t what’s being commoditized; it’s the LLMs, and in this new world, data is the new moat – and Salesforce has the data. As analysts at Wells Fargo declared , “lower cost of intelligence increases value of incumbent data.”
At the end of the day, AI agents are only as good as the data on which they operate. An AI agent working on closing a sale still needs somewhere to research the customer, log new interactions, store the contract, and customize the terms – and it needs decades of customer data and history to understand what all of it means. That’s where Salesforce comes in, as the ultimate repository of customer data.
Despite analysts’ delusions, Salesforce in reality has processed over 216 trillion customer records this year alone, and still counting . All that customer data, ranging from key customer contacts, to deal histories, to support tickets, to marketing interactions and histories, already lives inside Salesforce for virtually every major company. There is no way to just rip that out and store it inside a LLM instead of Salesforce – nor would anyone want to trust a LLM as the repository of all their proprietary customer data. Clean, unified, trusted data is exactly what AI agents need to function well, and Salesforce has more of it than anyone, with built-in security and confidentiality protections far surpassing LLMs.
No wonder the results reflect Salesforce’s position as an emerging AI winner. Agentforce, Salesforce’s AI agent platform, has gone from $100 million to $1.5 billion in annual recurring revenue within 18 months of launch , with well over 30,000 Agentforce deals already closed amidst exciting new partnerships with Anthropic’s Claude as the premier agent inside Agentforce. All those AI agents are producing more and more data by an exponential factor , which conveniently needs to be stored within Salesforce, with Salesforce ingesting 104 trillion records last quarter alone , double that of just last quarter.
And interestingly, the long-underestimated acquisition of Slack has become extraordinarily important to Salesforce’s AI future, as Slack is where key decisions are argued out, providing agents with critical context and human insights they would have never been able to glean from a database field alone. It is why Slack is growing at a record rapid clip, just delivering its fastest quarterly Net New Annual Order Value (“NNAOV”) growth since acquisition as Slackbot users grew over 150% Q/Q; and when Salesforce opened Slack up to outside AI agents, a million users plugged in within a month. Visionary founder/CEO Marc Benioff’s decision to spend $25 billion buying back his own stock in a single quarter earlier this year — the largest repurchase in company history, roughly a fifth of its market capitalization – is looking incredibly savvy for the largest repository of customer data on the planet.
The balance of power shifting to Salesforce, with Salesforce getting more pricing power, not less, is why leading frontier LLMs such as Anthropic are now rushing to strike partnerships with Salesforce, exemplified by the debut of “Claudeforce,” Salesforce and Anthropic’s exciting new partnership allowing full integration of Claude within Salesforce, a win-win partnership which will increase usage of both platforms and push cu...
The SaaSpocalypseSalesforceBookingIBMSaaSpocalypseMoreMark TwainOverSaaSpocalpyseSaaSJustFrancis Ford Coppola
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