The rise of agentic AI has sparked fears of an impending 'SaaS apocalypse,' where AI agents disintermediate traditional enterprise software, making user interfaces obsolete. But according to executives at Workday, Freshworks, and Snowflake, this narrative is overblown. Instead, they argue that while disintermediation is real, it will force a transformation rather than destruction, with vendors that focus on durable capabilities – such as trust, security, and specialized data platforms – emerging stronger.
Understanding the threat of AI disintermediation
At the heart of the debate is the concept of disintermediation: AI agents acting as the primary interface between users and business applications, bypassing traditional SaaS dashboards. Gartner estimates that up to $234 billion in application spending is exposed to agentic arbitrage between now and 2030, with AI interaction accounting for roughly 20% of enterprise SaaS spending by the end of the decade. This has led to a correction in SaaS valuations over the past 18 months, as investors worry about the long-term viability of traditional software models.
Yet, experts like Shannon Kalvar, research director at IDC, caution against apocalyptic thinking. 'The SaaS apocalypse is overrated, but your use of the word disintermediation is correct,' Kalvar said. He explained that AI-powered solutions like Claude, ChatGPT, or Perplexity can now write code and pull capabilities from multiple sources, creating an 'ephemeral application' that becomes the new work surface. This disintermediation poses a genuine threat, but it also opens opportunities for vendors that can provide unique, durable capabilities – the underlying logic, mathematical models, and governance that AI models rely on.
Workday: Building a trusted front door for work
Workday is one example of a vendor leaning into its strengths. Clare Hickie, CTO for EMEA at Workday, emphasized that trust is the company's core differentiator. 'Digital leaders are not always ready to adopt AI because of concerns about trust,' she said. 'What's crucial to recognize is that privacy by design and security frameworks are built into absolutely everything that we do.' Workday's strategy involves creating a 'front door to work' through its next-generation service, Sana, where employees log in and use agentic services to ask natural-language questions about payroll, benefits, and other HR issues. The durable capability here is Workday's role as a trusted platform for cross-business workflows, handling the most risk-averse organizations in the world.
Freshworks: Keeping the system of record intact
At Freshworks, CTO Murali Swaminathan echoed a similar message during the company's Refresh 2026 event. Freshworks is building an open platform for customer support, powered by its Freddy AI agentic technology. Swaminathan pointed out that while AI giants like OpenAI and Anthropic move fast, they are unlikely to target service management support. 'These AI specialists don't want to build everything. They want to be that layer where you engage, but the underlying layer will still be systems like ours,' he said. The data that runs organizations' operations remains in a system of record like Freshworks. Building an app that handles workflows, SLAs, and business rules is non-trivial, giving established vendors a strong moat.
Snowflake: Data as the foundation of AI
Snowflake co-founder Benoît Dageville acknowledged the potential for competition from AI firms but insisted that data remains the key differentiator. 'We have the data, and there is no AI without data,' he said. Drawing parallels to the rise of cloud giants like Amazon, Dageville recalled how Snowflake survived predictions of being usurped by AWS Redshift. Instead, Snowflake built a symbiotic relationship with AWS, offering customers choice. He suggested AI giants will face similar constraints: 'They don't fully understand this area – we are specialists in our technology, so I'm still not convinced they can build another Snowflake. And what's more, I don't think they want to.'
The role of agentic AI in reshaping enterprise software
Gartner's analysis supports the view that the shift to agentic AI is more metamorphosis than apocalypse. While some vendors will struggle, others will adapt by offering platforms that support cross-domain workflows. The revenue opportunity lies in developing services that help businesses integrate AI agents into existing processes. Kalvar from IDC stressed that vendors must ask themselves: 'What durable capabilities are you providing? What unique thinking, what mathematical capability?' Those that answer convincingly will survive and thrive.
The message from tech leaders is consistent: AI is changing the game, but the behind-the-scenes rules of enterprise software – governance, security, data management – remain critical. Governance, security, and data management are areas where traditional vendors have deep expertise. AI models are powerful, but they lack the context and trust that established providers have built over decades. As Workday's Hickie put it, 'We have the most risk-averse organizations inside our environments, and they look at us because they have to trust what we're constantly delivering.'
Moreover, the rise of agentic AI does not eliminate the need for specialized systems. For example, in HR, finance, or customer service, the workflows involve complex regulatory requirements, compliance, and nuanced decision-making that off-the-shelf AI models cannot yet handle. Vendors that can embed AI into their existing platforms while maintaining security and compliance will be well-positioned. Snowflake's Dageville emphasized that AI without data is meaningless, and data without trust is unusable. This dual requirement reinforces the value of established players.
In addition, the pace of AI innovation itself may create opportunities for incumbent vendors. As companies experiment with multiple AI models, they need a robust data layer to manage, govern, and orchestrate those models. This is where platforms like Snowflake, Workday, and Freshworks can step in, acting as the central nervous system for enterprise AI. The risk of disintermediation is real, but it is not uniform across all software categories. Vendors that provide transactional interfaces may be most vulnerable, while those that offer deep domain expertise, data management, and compliance will likely retain their relevance.
Looking ahead, the next few years will see a clear divergence between commoditized SaaS and specialized enterprise platforms. Companies that fail to invest in AI capabilities or that ignore the trust imperative may indeed face extinction. But those that double down on their durable capabilities – whether it's Workday's trust, Freshworks' open platform, or Snowflake's data foundation – have a strong chance of not just surviving but leading the next wave of enterprise technology.
Source: ZDNET News