The traditional “Software as a Service” (SaaS) business model is officially dead, a top executive at data analytics giant Palantir has declared. Danny Lukus, a deployment strategist at Palantir Technologies, claims that the rise of generative AI has made the old, expensive method of buying and configuring mass-market software completely obsolete.According to a report by Forbes, Lukus noted that while SaaS might be on its deathbed, the news isn’t bad for software engineering. Instead, AI tools mean forward-deployed engineers can now build highly customised, ultra-specific corporate software in a fraction of the time and at a fraction of the cost.
The death of the million-dollar software studies
Historically, building corporate software, especially for complex industries like supply chain management, was an incredibly slow and expensive nightmare, the report said, noting that companies had to hire armies of consultants and system integrators to conduct months-long studies to understand a business’s requirements before a single line of code was written.According to Lukus, AI platforms like Anthropic’s Claude and OpenAI’s Codex have flipped the script, which means that instead of waiting months for generic software packages, engineers can now walk into a company, use AI to rapidly generate custom code, build working models and workflows on the spot, get immediate feedback, and update until the solution fits perfectly.“The speed of being able to build that type of software is dramatically lower and dramatically cheaper,” Lukus asserted, adding that it is exactly why the traditional SaaS model is finished.
Lukus dismisses doubts on AI scaling, testing
There have been criticism that AI can build a quick prototype, but maintaining, testing, scaling and updating software to comply with changing global laws (like new trade tariffs) requires human domain experts. Lukus dismisses these doubts, explaining that generative AI can automate the heavy lifting of code testing and scaling. Instead of relying on a room full of lawyers, companies can deploy AI agents to constantly monitor government websites, the report said.Lukus notes that the things start to fall into place when multiple, specialised AI agents begin to collaborate with one another to manage entire business operations. These agents don’t need to possess god-like intelligence; they just need to mimic specific human roles within a chain of command.