SaaS in the Age of AI: Jason's Insights & Trends #shorts

Name: SaaS in the Age of AI: Jason's Insights & Trends #shorts
Uploaded: 2025-11-06T13:57:54+00:00
Duration: 1 min 44 s
Channel: Jason M. Lemkin
Description: In this interview, SaaS veteran Jason M. Lemkin discusses how artificial intelligence is reshaping software spending. He notes that AI is prompting both…

6 Nov 2025 · 2 min

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1:44

In this interview, SaaS veteran Jason M. Lemkin discusses how artificial intelligence is reshaping software spending. He notes that AI is prompting both CIOs and SMBs to allocate more budget to business software, likening the surge to the 2020 pandemic-driven spend spike. However, he contrasts this with the current reality of frozen overall IT budgets, leading executives to demand reductions in SaaS app portfolios—a phenomenon he describes as “app bloat” pressure. Lemkin highlights that major vendors, exemplified by Salesforce’s 6‑8% price increases, are consuming a growing share of incremental budgets, leaving little room for new SaaS purchases. Consequently, even successful SaaS companies are finding it harder to upsell existing customers because the budget that would fund new tools is being absorbed by existing vendor price hikes.

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But you've got a long history, Jason M. Lemkin, in the SaaS industry. In fact, you created a company called SaaStr. So you run a massive conference called SaaStr Annual. You know, what do you see going on in the world of SaaS and how is that transforming in the age of AI?
Well, look, some of this is marketing and hysteria, right? SaaS is dead. But there's a lot of truth in it. Let's step back. I mean, 2 things. One, AI is putting more CIO budget and probably more SMB budget into business software than ever before. In its own way, it's like the tidal wave of 2020 because we needed— all of a sudden budgets went up because everyone was at home, right? So budgets for e-signatures, for context, it just— there was no limits, right? We're not like that today. But tradition— now here's a stressor. Traditional budgets are frozen. In fact, CIOs are still going around the table at the end of the year and telling every functional head to cut some SaaS apps. We had Kaz, who just took over as CEO of Opendoor, he told them they had to get rid of 20% or 30% of their SaaS apps or they're gone the first week. That still seems to be a layup. We want you to cut the number of apps, we have app bloat, and worse, half of our incremental budget's going to price increases. Salesforce raised prices 8% this year, 6%. That compounds. So if I'm growing my IT budget 6%, and my core vendors are all raising prices 7%, 8%, how much room is there for another business process workflow app? Like, I'm sorry, the cap of the vendor— cutting the vendors and all the incremental budget going to price increases is tough. That's also why even the leaders are struggling with upsell, right? If all that budget went into my price increase at Salesforce, it's probably harder to buy another cloud, isn't it, at the margin, right?