Software stocks had a brutal start to 2026. Bloomberg called it “‘No Reasons to Own’” — and the data backs that up.

Morgan Stanley’s SaaS basket has lagged the Nasdaq 100 by ~40 percentage points since December 2024. HubSpot and Klaviyo? Both down roughly 30% this month alone. Reuters reports that AI disruption fears are driving a sector-wide selloff while semiconductors and memory stocks benefit from the same AI trade.

The market is pricing in extinction for traditional SaaS.

And honestly? They might be right — for vendors who don’t adapt.

What the Market Sees That You Don’t

Finimize puts it bluntly: “2026 is shaping up to be a hard year for software.”

The AI disruption isn’t theoretical anymore. It’s showing up in quarterly results, guidance cuts, and customer conversations. The market is asking: if customers can build their own tools with AI, why pay for your rigid platform?

This isn’t just analyst fear-mongering. Look at what’s actually happening:

AI coding tools are shifting buy vs build calculus. Tasks that required engineering teams now take hours with AI assistance. Even OpenAI’s chair acknowledges that “vibe coding” — building functional software through AI prompts — is a legitimate development approach now.

Your customers are doing the math: “Do we pay $500K annually for a platform that doesn’t match our workflow, or do we build exactly what we need?”

If your platform forces them to choose between “our way or no way,” they’re increasingly choosing “build our own way.”

The Two Types of SaaS Companies in 2027

In 12 months, the SaaS landscape will split into two categories:

Vendors who survived:

  • Became platforms customers build on top of, not just use
  • Enabled rapid customization without engineering bottlenecks
  • Created ecosystems where customers feel ownership, not vendor lock-in
  • Proved ROI by matching actual workflows, not forcing adoption of rigid ones

Vendors who got replaced:

  • Kept telling customers “that feature is on the roadmap”
  • Watched utilization rates decline as AI-built alternatives emerged
  • Lost renewals to “good enough” custom tools that fit workflows perfectly
  • Discovered too late that “enterprise grade” isn’t a moat when customers can build what they need

The difference isn’t product features. It’s whether customers can make your platform theirs.

What the Survivors Are Already Doing

The playbook is already visible if you look at who’s adapting:

ServiceNow has Creator Workflows — letting customers build custom apps on their platform using low-code tools. Salesforce opened up Agentforce for partners to build and package custom agents. Gartner predicted that 70% of new apps would use low-code/no-code by 2025 — and they were right.

The pattern is clear: platform + ecosystem beats standalone product.

Salesforce’s ecosystem generates economic impact far beyond their core product revenue. Why? Because when customers and partners build on top of your platform, they’re invested in your success. They’re not evaluating alternatives every renewal cycle — they’ve built their business on top of yours.

But here’s what most SaaS vendors miss: the low-code/no-code wave wasn’t enough. It solved the “technical barrier” problem but created a new one: complexity.

Building low-code apps still requires learning proprietary tooling, understanding your data model, and maintaining custom code. That’s why most low-code initiatives fail — they shift the bottleneck from engineering to a different team with different constraints.

The AI-Native Solution

AI changes the game because it eliminates the learning curve.

Instead of “learn our low-code platform,” it’s “describe what you need.” Instead of “understand our data model,” it’s “it figures out the schema.” Instead of “maintain custom code,” it’s “the AI refactors when your platform changes.”

This is what I call business vibe coding — customer-facing teams building functional custom apps through AI assistance, governed by your platform’s constraints.

Not end-users doing amateur coding. Not IT building shadow IT. Your CS, Sales, Implementation, and Solutions teams delivering workflow customizations that drive adoption and expansion without touching engineering.

Here’s why this matters for surviving the SaaS-pocalypse:

1. It defends against “we’ll build it ourselves”

When a customer says “we can just build this with AI now,” you say “build it on our platform — we’ll give your team the tools to create exactly what you need, with our security, compliance, and integrations built in.”

You’re not competing with their AI-built tools. You’re enabling them.

2. It turns customization from cost center to revenue driver

Right now, every custom workflow request is a cost — engineering time, roadmap prioritization, technical debt.

With AI-enabled customer app creation, customization becomes an expansion opportunity. “You need custom approval routing? Here’s how to build it on our platform. Need it across 50 departments? That’s an enterprise tier feature.”

3. It creates switching costs without vendor lock-in

When customers build their workflows as apps on your platform, they’re invested. But unlike traditional vendor lock-in (which breeds resentment), this is value lock-in — they stay because your platform makes them more capable, not because migration is painful.

4. It proves ROI faster than competitors

When every dollar is under scrutiny and buyers demand outcome-based pricing, the vendor who can demonstrate value in weeks (not quarters) wins.

Your competitor says “we’ll build that workflow in Q3.” You say “your team can build it this week.”

What This Actually Looks Like

Let me get specific about implementation:

For an ERP vendor: Your Implementation team discovers that 30 customers need custom approval workflows. Instead of filing feature requests, they build an approval workflow template using AI-assisted tools. Deploy it across those 30 customers in a week. Each customer then customizes it to their needs. Adoption improves, expansion conversations start.

For a CRM vendor: Your Sales Engineer is in a deal with custom requirements. Instead of “we can build that in 6 months,” they use AI to generate a working prototype during the POC. Customer sees it matches their workflow. Deal closes. You productize the pattern for the next 50 similar deals.

For an ITSM vendor: Your CS team identifies renewal risk because the platform doesn’t match evolved workflows. They use AI to build custom incident routing logic in days. Customer sees immediate value improvement. Renewal secured. You add the pattern to your template library.

This isn’t theoretical. The technology exists today. The question is whether you’ll deploy it before your customers deploy it against you.

The Urgency You’re Underestimating

Read the Reuters piece again: “AI disruption fears” are driving sector-wide moves. This isn’t one company missing earnings. This is the market repricing the entire category.

The market believes AI will disrupt traditional SaaS. The question is whether you’ll be disrupted by AI or empowered through AI.

Vendors who embrace AI-enabled customer customization will emerge stronger. They’ll have higher adoption rates, better retention, faster expansion, and genuine differentiation in a crowded market.

Vendors who cling to “our roadmap determines what gets built” will find themselves competing with free, AI-generated alternatives that match customer workflows perfectly — even if they’re technically inferior.

Because in 2026, “good enough and fits my workflow” beats “powerful but rigid” every single time.

The Path Forward

If you’re a B2B SaaS vendor reading this and feeling the pressure, here’s what survival looks like:

  1. Enable your customer-facing teams to deliver customizations directly — CS, Sales, Implementation, Solutions teams should be able to build workflow customizations without engineering dependencies

  2. Build AI-assisted creation tools into your platform — make it trivially easy for customers (or your teams on their behalf) to extend your product

  3. Create governance and templates, not barriers — the system should enforce constraints while enabling creativity

  4. Measure what drives adoption — track which custom workflows improve utilization and make those patterns available to other customers

  5. Price for value creation, not just seats — when customization drives expansion, capture that value

The technology exists. The market pressure is real. The vendors who adapt will survive the SaaS-pocalypse.

The ones who don’t will become case studies in what happens when you force customers to choose between your rigid platform and AI-enabled alternatives.

The market has already made its bet. What’s yours?

We help B2B SaaS vendors enable business vibe coding for their customer-facing teams. If you’re feeling the pressure and want to talk strategy, reach out at mail@namanyayg.com