Episode 115 Transcript

Brent Trimble: Welcome to the Professional Services Pursuit, a podcast featuring expert advice and insights on the professional services industry. Hey everyone, I'm Brent. I'm back. Today, I'm joined by Michael Speranza, the CEO of Kantata, to discuss how AI is reshaping the software industry in real time.

We’ll hear from him on why that matters for professional services leaders navigating growth, delivery, and profitability right now. This shift is showing up in how buyers and consumers of vertical B2B SaaS platforms think, how deals are evaluated, and ultimately how companies are being valued.

In this episode, we'll break down how the conversation is changing, what buyers expect now, and honestly, who's at risk and who is not. Across the market, a new kind of tension is emerging. On one hand, buyers are rethinking what's actually worth paying for. On the other, boards and investors are pushing leaders to prove their long-term value.

This should be an interesting conversation regardless of which camp you fall into. We'll reference Michael's recent article, “AI Is Coming for SaaS, Just Not the Way You Think.” This perspective is invaluable as it's extremely timely and top of mind right now. Michael, thank you for joining again. We value your perspective as a CEO, and I think the listeners will appreciate your insight.

Michael Speranza: Great, Brent. It's great to talk to you today, and I look forward to the discussion.

We've got the entire, I feel like in any given day, the business press—X all kinds of vignettes wherever you consume your information, LinkedIn posts—just talking about the idea of the “SaaSpocalypse.”

Let's just really start because you have a unique vantage point, probably one of the best vantage points. We're talking to you here in April of 2026, the CEO of a successful, profitable SaaS firm, and we want to dive right in.

Let's start with what you're hearing across the market. On one camp, we've got our buyers—people who are considering a platform like ours, a vertical B2B SaaS—saying things like, "Why should we make this investment or buy this if it can be coded or vibe coded with AI?" On the other side of the camp, this other tension you've got are boards and investors pushing the leaders of these organizations, saying, "How are you future-proofing your value of the platform?" You hear it from both ends. How do you reconcile those pressures? What does it say about where SaaS is headed?

It's interesting. I think the seat I sit in, every week is a different week with the two vantage points you mentioned there, Brent. For me, I think there's no doubt that the software and technology landscape is in the midst of a massive change. With any transition, there will be firms that embrace it and evolve, and others that struggle to find their way. Some of them will probably cease to exist.

What's different about this moment is really the rate of change. This is a point where we get into what's possible. What's making some folks uncomfortable lately is that the rate of change is extraordinary. When folks see something that they have not encountered in the past or have not encountered recently, it elicits a range of reactions and emotions. That's what we're going through right now. There isn't a day or a week that goes by where there isn't an extravagant or inflammatory story about how AI is changing the SaaS landscape. Some of it could be clickbait to get you to read the articles, but some of it is quite provocative and some of it's probably true. You have to discern that for yourself.

The two questions that I think are asked every day are either from a recent customer interaction or an interaction with a prospect considering making a purchase, or from our board and investors. One is, why should I invest? Why now? That question is really driven by thinking, can I build this? Every day my feed is populated with another story from Anthropic saying that you can build this for pennies on the dollar or questioning why you are buying what could be a legacy model. I actually think this is a wonderful question to be asking. There are many things that you can build, and that might be the right approach to automate repeatable, structured tasks and simple workflows. If it's specific to your business, that might be the right answer.

There's also a big divide where folks still need operational systems of record. We will talk more about this and get into why you would consider purchasing something. This is the age-old question. I think they are asking themselves why they should build it, and it's an entirely appropriate question to ask.

You know, the second part that you mentioned was really from our board of investors. I think this is one where everybody has seen the articles recently on the private credit markets and how folks are reacting. I would put it into the reaction category. You go back to folks living through something that they have not lived through before, and it elicits a reaction. The reaction that we're seeing is withdrawals and, in some cases, a little bit of panic around how people are thinking about the technology sector as a whole.

I can tell you the questions I'm getting from my board and from our investors are really just trying to have a patient understanding around how we're investing, how customers are using our products, how deep our relationships are, and what are the capabilities that we're bringing to market that provide durable, lasting value to our customers. What is our strategy to remain relevant to their business challenge? Those answers are evolving. Each week brings new feedback, new insights from customers that inform your product roadmap and inform the features that you're bringing to market.

Any tech investor at this stage should work with their companies, be patient, help them understand and develop these answers, share experiences across portfolio companies and how they're approaching it. This is a challenge that every company is facing. No one's immune to it. Everybody has to respond to make sure that they're building a durable future for their customers.

Just for our listeners, we're referencing an article that you offered, "AI Is Coming for SaaS, Just Not the Way You Think." I really appreciate your vantage point, the fact that you're running right at this. There is probably a tranche of the business world that might be putting their heads in the sand, metaphorically saying, "We'll wait this out, the dust will settle." It's not the end of the world. It's not a brave new world. It will cluster somewhere in the middle. To your point, there is always, daily, a new artifact around this. All the analysts—JP Morgan, Goldman Sachs, the investing market—they put out their lists of the most durable, those who have a moat, less likely to be disrupted, and then those that do not. You have a great vantage point in the article. I want listeners to be able to hear about this. A two-part question. We'll start with the first: Which SaaS companies, in your view, are at most risk right now?

Yeah, I think the ones most at risk are I would put them into two categories. One is a company that lacks deep relationships or understanding of their customers’ businesses. The simple way to think of this is somebody who is providing or meeting a very horizontal need that does not necessitate deep understanding or deep knowledge of workflows of how their customers are operating. This does not build up equity in a relationship where your level of understanding does not have to be deep to provide value to the customer. Those are the ones that are going to be vulnerable.

The other category I think is vulnerable is folks that are potentially pursuing the wrong path when it comes to how they're leveraging this technology. I think the entire market went through a reaction several years ago when this technology came on the scene, and everybody was racing to figure out how to use it. I don't think I'm alone here. For us, our approach as a vertical B2B SaaS organization is built on deep expertise and understanding of our clients' needs. We feel that's the currency of the future. We see a lot of folks focus on reacting and responding, throwing technology at problems, and trying to automate menial tasks, thinking that reducing human latency will lead to a lasting, durable experience for their clients. It won't.

There is a two-part danger here. One is if your product category is vulnerable and it just serves a horizontal use case, you need to get to work to really figure out what the currency of the future is going to be for your business. The other is the head fake where people think they have an AI strategy and they think they're building something that's durable, but they're not. They're just building and automating the status quo, reducing costs as low as they can. At some point, that approach is going to expire and they'll have to innovate again. I'd caution folks that that's my perspective. I don't think I'm alone there on many of those points, but really making sure that you have a durable long-term strategy.

It's sort of like a marketing analogy. I think it's really relevant to B2B SaaS. It's this idea: say you've got a budget and you want to acquire customers. If you spread it too thin, there's the idea of "spread thin, don't win." Dominate a category, don't dabble.

This leads to the second part of the question. Anyone in the listenership—there's a large part of our listenership that's the professional services organizations of B2B SaaS or SaaS companies—gets this type of question all the time as clients and prospective partners are evaluating our value proposition. Many of them are technologists and technology companies. They stop and ask, "Could we just build this?" Before the Anthropic explosion and all the LLMs, build versus buy has always been on the table. Do you think this is an acceleration of this? You speak in the article about cost compression of code, but that's really a nominal feature of B2B SaaS. Do you think this will continue to accelerate and large enterprises are considering getting back into their own software business and building versus buying a platform?

I certainly think everybody should buy more selectively. I think it's entirely appropriate to ask that question. I think folks have been asking that question for decades: should I build versus buy? I think the market clearly voted in a pretty overwhelming direction around vertical SaaS and buying something that's hyper specific to your needs. I still think that's going to be the case. Now, are there horizontal tech that is of surface level value that folks may want to build? Absolutely. I still think the capabilities are just vastly different than they exist even three months ago.

I still think this is an entirely appropriate question to ask. When I think of the question around build versus buy, I don't necessarily think of it around a particular category, but what should I be buying or what should I have confidence in buying now? The things that I think folks should still have confidence in buying now: you will need some sort of operational system of record. If you're going to have a meaningful, fruitful, durable business model as a company, data is going to be more important than ever. You need to access, acquire, store, index your data, gather your data. If you're investing in those operational systems of records—ERPs, operating platforms—those are things that are going to be fundamental no matter which course this takes. Step one is gather your data, control your data, then figure out how to use it and determine it.

To me, I think it's those sorts of categories where you would still make a confident decision that regardless of what the long-term landscape looks like in terms of AI and who evolves fastest and who's the fittest, as a business it is still a business-critical issue to own and control your data. Beyond that, make sure you understand that there's a strong value quotient for what you're purchasing. More so than ever, the quantitative result that you're going to deliver from deploying a piece of software matters. Buying the software is just one component of it. If you have to deploy it, you have to operationalize it, you have to use it. I think I'd be putting my money into things that have big bets and big payoffs. The market is going to evolve rapidly at the edges. There isn't a day that goes by without inquiries about new marketing tools or new demand generation tools. There are probably ten a day coming out. For those sorts of tertiary tools at the edge, exercise caution and really understand how durable those things are. That market will move incredibly quickly, and your ability to drive a meaningful payback or use of a software like that is probably questionable in this stage.

To follow on the build versus buy equation, before we get into our train here, which we’ll resolve with how to defend value and be one that survives and ultimately thrives in the market. A lot of the AI conversation on the periphery, even if you're a nascent consumer or periphery consumer of this kind of information, is really around, can AI build software? I guess the short answer is in many cases, yes. For SaaS leaders, the real question seems to be what systems and tools does the market need to operate, differentiate, and create value in an AI-driven market? That's what you're getting at there. If you could summarize that in a couple of bullets, what do you think is the real conversation that internally SaaS leaders should be thinking about as they think about things like roadmap and how to be durable?

I think it's all about defining your currency of the future. It's not the product. If you find yourself saying, "What differentiates your company? We've invested a decade in building this product over time," that's not the answer. Number one, wrestle with that problem and be honest about it. Step back and ask, "What is the currency of the future?" In many cases, the currency of the future is context built upon information. These models don't live, exist, run, or operate unless they can learn, and you are feeding them the right context. Our CTO had a poignant way of positioning this recently—relating it to agents, vehicles, and cars. Agents are the car, and context is the map. Right now, the cars are going one hundred miles per hour in the dark without a map. Context is the differentiating element of the future.

That is certainly our approach. We are building up those data models, building up the knowledge graphs around vertical industry expertise in what we do for our customers, then using that context as something that will differentiate us in the future. If you lack that information or lack that knowledge, if you do not have the war chest of data or information to help you build context around your industry that is important to your customer, that would be a warning sign. I would start to think deeply about what your currency of the future is. Obviously it is not the product or the code. Everybody has proven that these models can write plenty of code quickly. How that code actually operates is an entirely different story. Does that code actually provide value to your business? It cannot do that without context.

Let's transition now into that value. You've acknowledged, I've acknowledged, we've both seen and experienced AI-generated code and technology. Let's presume that's going to continue, and that's a piece of the business when you're constructing a vertical B2B SaaS company. Let's say we no longer need—maybe the velocity of code has now increased, and let's presume the quality is good enough. AI has, to a degree, commoditized that function. Where do SaaS leaders start to create and defend value? You mentioned that this is a perfect tee up to your last comment about twenty-year investment in legacy code bases in the enterprise not being the answer. To play off that, go a little deeper, I think, in this idea of context.

Yeah. I think context starts from data, quite honestly. If you have a deep relationship with your customers and what you do is important for them, there's going to be a war chest of information, data, and insights that is hopefully embedded in your product or however your customers are using your product. That allows you to build this context map for the future about how they're operating. To me, that's the first point that really goes deep there. In making sure that you have trust with your customers, I think this is a journey. No one knows the answer yet. As much as customers want to embark on this mission, I think they're afraid of making a mistake.

Yeah, absolutely.

You've got an arms race when it comes to what direction folks are moving in, who's going to be fastest, who's going to win, who's going to survive, and what ends up being the right answer. I've seen many customers be patient and more fearful of committing too soon to a particular approach, model, or provider, and wanting to have optionality. That's an incredibly wise decision.

For us, it's making sure that we've got context and information, and that I've got trust with the vendor. At the end of the day, whoever you're working with, the key to context is a tenured relationship, having data, and having them truly understand your business. If your provider doesn't understand your business, how are they ever going to deliver something durable and meaningful in the future?

The last piece for me is making sure that you believe in their AI strategy. It may not deliver what you want in the time you want it. You may want some things quicker than what they're able to deliver, but marrying up the fact that they have trust, context, and that you have a deep understanding of their AI strategy, and that you have a vote when it comes to what their strategy is, is important. Their AI strategy is going to change—guaranteed. The only thing is that they have to make sure they remain adaptable in their strategy. If someone is too resolute about it, that would be a warning sign for me.

We were talking about this, and you were sharing some of the POV on the article that you wrote. There have been several cogent points of view coming out. You made a reference to the private equity markets, the LPs, and pressure from boards. Vista came up with, I thought, a good summary of this, saying something like, think of a company like a home. In this analogy, enterprise software is not the furniture; it's the foundation and systems of the home that make everything function. It's the electrical system, plumbing, and security that make a home habitable. Remove the foundation, and operations don't slow down—they stop. Tying into your theme of deep credibility, context, trust, and understanding of the client's business.

I thought that was a great article, or a great summary of a position on the market. I think they're absolutely right about the foundational element of software, but like I referred to, that deep software system of record type foundation, where you need data to operate your environment. That's where I would invest confidently and comfortably, and perhaps even accelerate your investments.

If you don't have control of your environment today, you will be outmaneuvered by competitors. Every piece of AI technology used relies on consuming information, interpreting it, and applying it to your business. If the information doesn't exist in an easy way that's consumable by these models, you will get outmaneuvered. That's the honest truth.

I've seen firms hesitate to invest in that software. That is the wrong decision. This is one area where I would confidently invest. The AI that comes later on top of that is going to create another explosive wave of capability that you don't have today. Without those foundations, it will be very hard for folks to survive, quite honestly.

As we wrap here, this has been fantastic. The point of view and the fact that you're living this as a CEO of a vertical B2B SaaS platform are extremely timely, very prescient insights. The bottom line: if you're in professional services within a B2B SaaS company, if you're on the board, if you're in product and you're grappling with synthesizing all that's coming out of the industry, what really survives, what actually survives in this market dynamic?

Things that survive are the firms that recognize the currency of the future is all about context and deep knowledge of the customer's environment. To me, that is a huge vote on vertical focus, industry focus, and specialization. That is number one. Number two, back to someone who has an adaptable AI strategy for the future. This is a market that is changing rapidly. Anyone who says they have all the answers is delusional. You have to be on top of it, consume the information as it is coming at you, and remain adaptable with your AI strategy. How are you building it and really building the third leg of the stool, which is the trust with your customer? At the end of the day, in most cases, when folks are buying enterprise software products, these are long-tenured relationships.

The average lifespan of an enterprise software relationship is over six years. These are not things that evolve overnight rapidly. Customers are going to have some level of patience, especially for providers that are providing deep workflow knowledge and deep expertise. For them to get it right requires a trust and collaborative relationship with the customer. I encourage everybody to think about those three pillars and make sure you are being honest with yourselves and with your firm about how you are investing and where you are investing. Are you really solving the lasting issue for your customers? A cautionary note for me is noticing everybody running to this false positive narrative about agents and automation—it is the flavor of the day. At the end of the day, that is not going to deliver lasting value to a client. If that is what you are focused on, make sure you pause and reassess, and continue to validate with your customers.

That's outstanding. I appreciate that succinct wrap-up and summary. For our listeners, much of what we've been discussing is relevant. If you've made it this far in the pod, hit replay. Michael has authored an article that will be available on our website. We'll put the link in the show notes. The title is "AI Coming for SaaS, Just Not the Way You Think: A B2B SaaS CEO's Perspective on the SaaSpocalypse." We'll put the link there. It will be on our website shortly. Michael, I appreciate the article; it's fantastic. I also appreciate the time you've shared with us today and look forward to connecting in the future. Thank you so much for joining.

Thank you, Brent.

As always, thank you for listening. If you have any follow-up questions for myself or Michael, we would love to hear them. Send us an email at podcast@kantata.com. We would be happy to keep the conversation going.

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