The effects of code no longer being a moat

Building software is cheaper. That's not really up for debate.

The real debate is what that means for SaaS, open source, and software companies in general.

I think the best software is the kind that fits a customer's exact workflows and problems, and keeps evolving as those evolve.

Traditional SaaS struggles with that. Every customer is a bit different, but rarely different enough to justify changing the core product. At the same time, customers can't adapt the product themselves because they don't control the code. In SaaS, customers adapt to the product.

In the past, a company would only build its own solution if the problem was big enough to justify the cost and complexity of building, deploying, and maintaining software internally.

That threshold is falling fast. With coding agents, companies need fewer resources, and a smaller problem is now enough to justify building their own tools.

Still, building from scratch isn't always the right answer. Customers don't always know exactly what they need, and they often design poor solutions to real problems. In many cases, they benefit from guidance from people who understand the domain deeply.

That's why the best model may be a hybrid one.

Customers should get shared improvements by default: updates, fixes, and features that benefit everyone. But they should also be able to adapt the product themselves when they have specific needs, ideally with expert guidance when needed.

The hard part is making both worlds work together without creating merge conflicts, security risks, or operational chaos.