About a year ago, Satya Nadella made a bold prediction: traditional SaaS is dying, destined to be replaced by AI agents that handle business logic directly.
At the time it sounded like an overstretch. From early 2026, it looks accurate.
Agentic AI will sweep out most SaaS by being more agile, scalable, and flexible. The field is transforming from tools to actions.
The engine of the agentic revolution is coding agents: these are RL post-trained models that can coherently pursue specific goals over longer time horizons. The rapid improvements in capabilities are clearly displayed on metr.org charts.
Codex 5.3 and the brand new Claude Sonnet 4.6 are the result of such training, and their existence is proof that software is transforming from an expensive, rigid, and slow structure to an ever-changing, intelligently adjusting system. Human-written software in the new era would feel like carefully carved statues competing for colonization against organic growth.
Traditional SaaS can’t justify seat pricing against feature-equivalent agents that are being spun up on demand, aiming directly at customers and aligning with their exact needs. Margins will collapse, and the whole business model dies with it.
The internet commoditized publishing — attention became scarce.
Cloud commoditized servers — orchestration and security became valuable.
Software commoditizes logic — trust and identity become scarce.
When software becomes a commodity, agentic approaches will blast open new flows, only to hit the next set of choke points we haven’t solved yet.
Governance. How do we align and measure agents? What about swarms? What about agents spawning and mutating into job-specific alter egos?
Proof-of-personhood. CAPTCHAs aren’t strong enough to stop the flood. How do we gatekeep human-only services?
Trust. In our procurement workflows, which agents do we allow to commit to an order quotation?
Spam. How do we tackle the first wave of agent-driven noise — the scenario Nikita Bier warned about, where automated agents clog communication channels before defenses exist?
These become the new infrastructure layer. The first movers who address them inherit the greenfield.
Nadella foresaw the end of the SaaS era and the opening of the era of agents. What comes next for software reminds me of Bruce Lee’s famous words:
Empty your mind, be formless, shapeless, like water.
Put water in a cup, it becomes the cup.
Put water into a teapot, it becomes the teapot.
Water can flow or creep or drip or crash.
Be water, my friend.
