The new moats of SaaS

People keep talking about the SaaS-o-calypse. The truth is messier. SaaS is not going away—running serious software is a lot of work. Warren Buffett talks about moats: the best businesses have “a wide and long-lasting moat around them, protecting a terrific economic castle.” The ability to keep its width and its impossibility of being crossed is what makes a business durable. Building and maintaining a real product—security, compliance, uptime, integrations—is that kind of moat. You can’t vibe-code your way into it and you can’t buy it off the shelf. That effort is exactly why SaaS persists.

Enterprise learned this the hard way. The cost of owning everything is enormous. Every tangential system—internal tools, custom dashboards, one-off workflows—has to be maintained. Big companies that treat software tangential to their core business as something they’ll run forever run into a wall. The cloud migration wasn’t just about moving servers. It was a bet on focus: let someone else run the undifferentiated heavy lifting so you can pour energy into what actually differentiates you. That focus isn’t something you can purchase. It’s a strategic choice. And the vendors who run that undifferentiated stuff? They have to keep earning it. Vibe-coded internal tools and duct-taped dashboards cannot be maintained at scale. The companies that try end up with a thousand little fires. The ones that outsource to serious SaaS get consistency and a real moat—the vendor’s—around the problem.

So SaaS is not going away. The effort to maintain it is the moat. But here’s the turn: the cost of software is going down, especially for use-case-specific needs. Customization and scripting are getting cheaper. LLMs write glue code. Low-code and automation tools let teams wire their own workflows. The era of “one big platform that does everything” is being nibbled at by “do exactly what I need, nothing more.” SaaS companies that ignore this will die by a thousand paper cuts. A customer doesn’t leave because you’re terrible. They leave because they found a script, a small tool, or a custom integration that does their one thing 80% as well for 20% of the cost—and that’s enough. The new era is make-or-break on how well you embrace customization, scripting, and integration instead of fighting it.

The takeaway isn’t that SaaS is doomed. It’s that the bar moved. The moat is still real operations, trust, compliance, support but the castle has to have open lawns and gates. Let people script. Let them customize. Let them plug in their own logic. The vendors that make that easy will widen the moat. The ones that don’t will watch their customers slip away one workflow at a time.

Disclaimer: I work for a SaaS company. Take the above as one person’s read, not company gospel.