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Comment by aobdev | Hacker News Reader

Why does AI make it cheaper to build internal but not cheaper for SaaS competitors to pop up? Everyone has access to the same tools.

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Oh sure! My conclusion is that they will drop in value, not disappear.

Basically I expect way smaller companies popping up competing with the big ones and their offering will be priced way lower because their payroll is way smaller.

While there is no competitor, internal tools will pop up now.

I believe that. Companies will build cheap tools today while competitors are spinning up to undercut ADP, Salesforce, and SAP. But what happens tomorrow? There are plenty of examples in IT today where the reasonable option is to outsource in 90% of cases: don’t roll your own auth, don’t host your own email server, don’t build your own data center. I don’t see how AI can change that, when the people who build specialized software also have access to AI.

Another great example is open source. I think PostgreSQL being free and usable by everyone is a more economic outcome than every Fortune 500 company building their own database engine. Payroll, ERP, and CRM fall into the same category of being commodity software in a lot of cases.

My experience is that the folks in charge of spending and making decisions are looking at AI as another means of outsourcing. Payroll, ERPs and CRMs went from commodity software to subscription services and anything that is subscription based is getting scrutinized much more heavily now.

It does make it cheaper, obviously. But the barrier to entry is almost zero, like panhandling. That's why it can't substitute a job.

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