AI & The Great SaaS Bifurcation

Are you embedding or surfacing?

The SaaS market is splitting into two irreconcilable extremes—and the middle is being evacuated. This isn’t a temporary disruption or a cyclical correction. It’s a structural bifurcation driven by two converging forces: the democratization of development through AI-assisted coding and the intensification of enterprise integration dependencies.

What emerges is a barbelled market structure where software companies must choose between racing to the commoditization floor or climbing to the embedding ceiling. The traditional SaaS playbook—good product, fair price, reasonable moat—is no longer viable.

This isn’t just a product shift. It’s a complete rewiring of how software companies build, monetize, and reach customers.