Scott Galloway
Professor of marketing at NYU Stern and author of bestselling books including The Four and The Algebra of Wealth.
“The new wave is going to be a SaaS company focused on a vertical that's AI-enabled, and then they offer the end service itself. They're not going to be selling software. They're going to be selling the service. They'll go upstream and say, we'll actually do your taxes for you. We'll do your compliance for you.”
The Prof G Pod with Scott Galloway · Tech Strategy & Big Tech · November 2026
Context
Answering a listener's question about the 'SaaSpocalypse', Galloway argues rumors of SaaS's death are exaggerated, then predicts the next growth area is AI-enabled service firms rather than software sold to the customer.
Transcript
…dollar is kind of where you're. You know, in new business is worth $9 because it's going to be in there for nine or 10 years. But I think the feeling is that with the impending meteor of AI, people are taking terminal value way down. What do I mean by that? There's no longer the same certainty that
…talking about debugging. You're talking about events they all want to go to. You're talking about customer relationships. You're talking about a certain level of security. If this thing blows up and gets hacked and shuts down your business, that there's someone you can sue, so it's less likely
to happen. Will it probably put pressure on margins? Absolutely. But these companies aren't stupid. They're also using AI to make their products more competitive and more deft and more efficient, such that they can probably lower the price. So what happens here? I mean, just to give you an example, these companies usually spend somewhere between 10 and 20% of their top line on technology, meaning that arguably 80% of the value they add isn't in the tech itself. It's in things like client relationships, customer service, debugging, risk assessment, you know, all that stuff, events. So will it put pressure on their margins as they either don't need to spend as much on technology or other AI companies can replace you more easily? Sure. But I can tell you my company uses Salesforce, and I can't imagine. I don't care how, I don't care if the next thing is free. We're just used to the user interface. We're used to the UI. So I doubt now we'll also add AI. We'll spend more on AI. So at some point, we probably need to cut costs somewhere. But so far, the market has said that the rumors of SAS's death…
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