CIOs and corporate software buyers are threatening vendors with vibe-coding, but it’s much more about getting a better price than it is about actually switching. The idea is appealing: get an agent to replicate your existing solution and run it in-house for a few hundred dollars in tokens and ditch the costly software license agreement. Never talk to another software salesperson again.
So far, it’s not working. One survey showed that 35 percent of teams have replaced at least one enterprise application with something they vibe-coded, but this is most often in categories like workflow automation and business analytics—these are additions and don’t point to actually cancelling the entire software license. Industry revenue retention—the rate at which customers renew—has fallen slightly, but there’s no agreement on the cause and earnings haven’t been significantly affected.
Having a vendor is useful because the true cost of vibe-coding software is much higher than a few hundred dollars in tokens. For critical enterprise systems, you need to build and hold on to expert human resources to guide the development and maintenance of new solutions, and you’ve got to manage all the traditional complexity of moving from one solution to another. And never, ever, underestimate the appeal of having someone to blame if things go wrong.
So if vibe-coding is more costly and complex than it at first appears, why is the SaaSpocalypse still gaining steam? The answer is that AI is radically reshaping the software business itself and the result is going to be a flood of new entrants. CIOs won’t need to vibe code new solutions because incumbent software vendors are about to face a tsunami of vibe-coded competitors, all coming up with competitive solutions and rock-bottom pricing.
Traditional enterprise software companies are costly to build and maintain. In addition to teams of developers, as the software grows, maintaining it becomes a monumental challenge as software bloats with features only one client uses. Throw in a huge sales force and a high cost of sales and you end up with products that have multimillion-dollar price tags for enterprise customers that use a fraction of the functionality available.
This can work when you need scale to survive, but AI is changing just about everything in the software business. First and foremost, you can build and maintain software at a much lower cost than in the past. But the transformation doesn’t stop there.
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