{"id":12265,"date":"2024-11-20T10:00:29","date_gmt":"2024-11-20T04:30:29","guid":{"rendered":"https:\/\/gtm360.com\/blog\/?p=12265"},"modified":"2026-04-09T16:50:12","modified_gmt":"2026-04-09T11:20:12","slug":"three-immediate-consequences-of-saas-repatriation","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2024\/11\/20\/three-immediate-consequences-of-saas-repatriation\/","title":{"rendered":"Three Immediate Consequences of SaaS Repatriation"},"content":{"rendered":"<p>We did not reach a conclusion on the outlook for <strong><em>SaaS Repatriation<\/em><\/strong> at the end of\u00a0 our previous blog post <a href=\"https:\/\/gtm360.com\/blog\/2024\/10\/02\/will-chatgpt-kill-saas\/\" target=\"_blank\" rel=\"noopener\"><strong>Will ChatGPT Kill SaaS?<\/strong><\/a>. But that doesn&#8217;t mean the fledgling trend won&#8217;t have any impact.<\/p>\n<p>(For the uninitiated, &#8220;SaaS Repatriation&#8221; is the new movement where companies shut down their SAAS and develop the required functionality with <em>ChatGPT<\/em>, <em>GitHub Copilot<\/em>, <em>Replit<\/em> and other GenAI coding copilots. Just to be clear, the goal is not to build the entire functionality of SAAS inhouse but only the subset that they actually use.)<\/p>\n<p>I foresee at least three consequences of SaaS Repatriation in the immediate term.<\/p>\n<p><strong>1. End of point SAAS solutions?<\/strong><\/p>\n<p>Much of our assessment of AI BUILD versus SAAS BUY option in <a href=\"https:\/\/gtm360.com\/blog\/?p=12230&amp;preview=true\" target=\"_blank\" rel=\"noopener\"><strong>Will ChatGPT Kill SaaS?<\/strong><\/a> implicitly assumed repatriation of large and integrated SAAS suites like <em>NetSuite<\/em>, <em>Salesforce<\/em> and <em>WorkDay<\/em>. But SaaS Repatriation doesn&#8217;t need to go there: There are zillions of small, point SAAS solutions in the typical enterprise. AI BUILD might be able to replicate their functionality quite easily and kill them.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">Last week my friend\/cofounder <a href=\"https:\/\/twitter.com\/matthew_loper?ref_src=twsrc%5Etfw\">@matthew_loper<\/a> used o1 to turn the transcript of our meeting we had into a project spec, then gave that to <a href=\"https:\/\/twitter.com\/Replit?ref_src=twsrc%5Etfw\">@Replit<\/a> agent. Next day he demo\u2019d the app.<\/p>\n<p>Mind blowing workflow.<\/p>\n<p>Yes, he had to fix some issues but this stuff is only getting better.<\/p>\n<p>\u2014 Eric Rachlin (@eerac) <a href=\"https:\/\/twitter.com\/eerac\/status\/1842710033039348008?ref_src=twsrc%5Etfw\">October 5, 2024<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>You can find examples of point SAAS in attendance recording, application tracking, truck dispatch, barcode printing, contact management and other areas of mid to large enterprise.<\/p>\n<p><strong>2. Negotiate discounts from SAAS vendors<\/strong><\/p>\n<p>Over the years, customers have realized that the subscription fees for their SAAS products exceeds the lifetime license fee for their COTS products after around three years. From this, companies have surmised correctly that SAAS vendors have very high margins. SaaS Repatriation enables them to posture that they will shut down their SAAS products and use AI to build the required functionality inhouse. Savvy SAAS customers will no doubt use this threat to extract discounts from their SAAS vendors when the time for negotiation of contract renewal comes.<\/p>\n<p><strong>3. Pump up valuation of GenAI code assistants<\/strong><\/p>\n<p>Even if AI never kills SAAS, the posturing that it will disrupt SAAS will create tons of value for GenAI coding copilot startups and their venture capitalists, just as it did for eBook, EV, Fintech and other products that never killed their incumbent counterparts.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">eBook hasn&#8217;t killed print book.<br \/>\nEV hasn&#8217;t killed ICE.<br \/>\nFintech hasn&#8217;t killed Bank.<br \/>\nDigital Payment hasn&#8217;t killed Cash.<br \/>\nCrypto hasn&#8217;t killed Fiat.<br \/>\nBut that hasn&#8217;t stopped the creation of trillions of dollars in value by spreading the propaganda that they will. <a href=\"https:\/\/twitter.com\/hashtag\/GoFigure?src=hash&amp;ref_src=twsrc%5Etfw\">#GoFigure<\/a>.<\/p>\n<p>\u2014 Ketharaman Swaminathan (@s_ketharaman) <a href=\"https:\/\/twitter.com\/s_ketharaman\/status\/1486632615817920519?ref_src=twsrc%5Etfw\">January 27, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<hr style=\"width: 70%;\" \/>\n<p>While introducing the expression <em>SaaS Repatriation<\/em> at the start of <a href=\"https:\/\/gtm360.com\/blog\/2024\/10\/02\/will-chatgpt-kill-saas\/\" target=\"_blank\" rel=\"noopener\"><strong>Will ChatGPT Kill SaaS?<\/strong><\/a>, I tipped my hat to the term &#8220;<em>Cloud Repatriation<\/em>&#8220;.<\/p>\n<p>For the uninitiated, <em>cloud repatriation<\/em> is the trend of companies moving their workloads from public cloud to private cloud, largely to save costs.<\/p>\n<p>Cloud Repatriation shot into the limelight when <em>Basecamp<\/em> and <em>Dropbox<\/em> announced in 2022 that they were shutting down their <a href=\"https:\/\/basecamp.com\/cloud-exit\" target=\"_blank\" rel=\"noopener\">cloud infrastructure<\/a> and moving their workloads back to onprem datacenters. Their move was prompted by the mounting costs of cloud versus predictable costs of onprem.<\/p>\n<p>Two years later, let&#8217;s see where cloud repatriation stands.<\/p>\n<p><em>Dell<\/em> recently pointed to the repatriation to onprem infra by German retailer <em>Lidl<\/em> and claimed that <a href=\"https:\/\/www.linkedin.com\/posts\/mdell_not-surprising-83-of-enterprises-plan-activity-7234239048385445888-dGJn\/\" target=\"_blank\" rel=\"noopener\">83% of its customers are planning a similar move<\/a>.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2024\/10\/cloud-repatriation-dell-fi.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-12978 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2024\/10\/cloud-repatriation-dell-fi.jpg\" alt=\"\" width=\"630\" height=\"360\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2024\/10\/cloud-repatriation-dell-fi.jpg 630w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2024\/10\/cloud-repatriation-dell-fi-500x286.jpg 500w\" sizes=\"auto, (max-width: 630px) 100vw, 630px\" \/><\/a><\/p>\n<p>In sharp contrast, Gartner recently <a href=\"https:\/\/www.theregister.com\/2024\/06\/20\/gartner_networking_cloud_hype_cycles_ai\/?td=keepreading#:~:text=Gartner%20has%20declared,appropriate%20cloud%20initiatives.%22\" target=\"_blank\" rel=\"noopener\">dropped Cloud Repatration<\/a> from its Hype Cycle, citing very little client interest in the topic.<\/p>\n<p>These are diametrically opposite views!<\/p>\n<p>If the jury is still out on cloud repatration after so many years, I don&#8217;t expect a conclusive outlook to emerge on SaaS Repatriation for the forseeable future.<\/p>\n<p>Meanwhile, vendors and VCs of GenAI code assistants will posture that GenAI will kill SAAS to pump up the valuation of their companies whereas vendors and VCs of SAAS will claim the opposite to preserve the valuation of their companies.<\/p>\n<p>Life will go on.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We did not reach a conclusion on the outlook for SaaS Repatriation at the end of\u00a0 our previous blog post Will ChatGPT Kill SaaS?. But that doesn&#8217;t mean the fledgling trend won&#8217;t have any impact. (For the uninitiated, &#8220;SaaS Repatriation&#8221; is the new movement where companies shut down their SAAS and develop the required functionality &#8230; <a title=\"Three Immediate Consequences of SaaS Repatriation\" class=\"read-more\" href=\"https:\/\/gtm360.com\/blog\/2024\/11\/20\/three-immediate-consequences-of-saas-repatriation\/\" aria-label=\"Read more about Three Immediate Consequences of SaaS Repatriation\">Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":12978,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,18,8,13,1,15],"tags":[32,105,106,31],"class_list":["post-12265","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-b1-integrated-marketing","category-b2-product-v-services","category-it-marketing","category-product","category-mandatory-category","category-vc","tag-ai","tag-contract","tag-negotiation","tag-saas"],"_links":{"self":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/12265","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/comments?post=12265"}],"version-history":[{"count":9,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/12265\/revisions"}],"predecessor-version":[{"id":14315,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/12265\/revisions\/14315"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media\/12978"}],"wp:attachment":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media?parent=12265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/categories?post=12265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/tags?post=12265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}