SaaS, or Software-as-a-Service, has taken over business applications. From accounting, sales, CRM, HR, Marketing, project management to ERP – almost all businesses use some kind of SaaS product. In a survey by BetterCloud, it was estimated that in 2025, 85% of all business applications are SaaS applications. Further, Fortune business insights estimated that the market for SaaS exceeded $300 Billion in 2025 and is projected to have a 20% CAGR and reach over $1T by 2032.
This seems like a pretty rosy picture, so how is SaaS dead? It’s because SaaS in the traditional sense is experiencing a paradigm shift; the traditional operating model of developing a single software product, hosting it, and distributing it through the internet is changing. The problem with this old model is that businesses are different. This is especially true for supply chains and manufacturers. Different volumes, product mixes, geography, machinery, customers, setups – everything, is unique and the ideal solution is something more customized. The one size fits all approach of traditional SaaS was never optimal, systems were dictating business processes instead of the other way around. And prior to advances in GenAI, developing stand-alone custom software for each individual customer was hopelessly infeasible.
To get a sense of where business application software is going, it’s helpful to get a sense of where it started. We’ll review on-prem, the shift to cloud, and then outline what the business software of the future looks like for manufacturers.
Where did SaaS come from? It Started with On-Premise Software
Business software was originally delivered on physical disks and loaded onto on-premise servers at the customer’s location. On-premise business software was very expensive and could only be created by highly skilled programmers. It was costly to implement, costly to upgrade, and required high overhead to manage physical servers. Because of those limitations, this type of software was historically only utilized by large enterprises.
Shift to Software as a Service
Cloud software was a paradigm shift that enabled better economies of scale and faster, cheaper implementations, upgrades, and maintenance. This was a much more affordable business model and drove deeper market penetration thanks to its accessibility to smaller businesses. However, it still required large teams of highly skilled programmers and considerable fixed costs to develop, maintain, and update. Plus, to accommodate the wide range of unique business needs, these legacy software systems have become inundated with evermore features and configuration options. This strategy ultimately led to feature bloat, resulting in bulky, overly complex software that still cannot be fully customized to distinct business needs.
To summarize, some of the core customer pain points with Off-the-Shelf SaaS include:
High licensing costs, lack of ownership of the software
Inability to customize software to the needs of the business
Lengthy feedback-to-action cycles. Customers submit feedback on improvements and their feedback is either: completely ignored, read and deprioritized, or read and eventually put on the roadmap and maybe implemented (after a lengthy product review and development cycle that can last 6-9 months).
Lack of control over pricing and limited overall value proposition.
Companies are beholden to the update cycles of the vendor rather than being able to dictate when and how they want their systems to be updated.
Bundled features that aren’t useful or needed.
A deluge of settings and configuration options that bloat the system, come with extensive training periods, and require system experts to manage.
Increasingly complex systems with no significant added benefits to the business.
The Business Software of the Future
In the same way that cloud software displaced physical, on-premise software, AI has enabled the ability to both 1) Disrupt the traditional Off-the-Shelf SaaS market, and 2) Increase the adoption of business software more broadly by providing the market with cheaper, truly customizable solutions. What used to require both highly skilled technical experts and extensive development cycles now can be done with technical specialists and much shorter development cycles. While creating software with AI isn’t yet at the point where a novice can design, build, and implement it themselves, it has made the entire process dramatically more affordable and accessible, which has several implications:
Customers can pay an upfront cost to an agency to build the system to their specifications. After completion of the contract, the customer owns the software. They can choose who maintains it, which servers it uses, when, how and who updates it.
Customers can implement whichever changes they want whenever they want by using contracted hours. They are no longer beholden to the lengthy product development cycles of large vendors that may or may not implement, or even acknowledge, their feedback.
The argument that customers don’t know what they want is easily addressed: within the custom software model, the development company acts as a true partner, actively advising the client on optimal solutions and state-of-the-art technology they may be unaware of. The fundamental product management principle of separating the problem space from the solution space remains fully applicable.
Companies can achieve optimal value delivery by designing business software that adapts to their ideal processes, rather than having the software impose a rigid way of managing workflows. The software should possess the flexibility of water, easily taking the form the business requires.
Businesses have significant control over the cost of maintenance, software licensing, and product updates.
No deluge of settings, configurations, and views that were an attempt to be too many things to too many people. Instead, the software can be exactly what it needs to be for exactly who it needs to work for – no more, no less.
With many small- and medium-sized businesses, the challenge with SaaS has not been the price, but the overall value proposition. Legacy systems are too generic, and the clunky, off-the-shelf system configurations end up making the overall product too complicated for users and too bloated to be truly useful.
A better solution is a custom-built system that is streamlined to fit the company’s needs precisely, incorporating all the required functionality and eliminating unnecessary drag. A completely customized system provides a clean, efficient user experience, letting employees focus solely on the task at hand.
Lasso – Your Technology Partner
Lasso is a software development agency created to bring this new software paradigm to reality and it starts with our simple process that turns your ideas into custom systems for your business:
Initial Consultation: It starts with you. Your needs, pain points, and ideas. We get a comprehensive understanding of your business and where our custom software solutions can deliver value to your business.
Scope & Estimate: Based on your requirements, we’ll create a design proposal for your project. We’ll continue to ideate with you until we have a project scope and estimate that meets your requirements & budget.
Milestone Deliverables: Agreed upon milestones with key deliverables will be defined, delivered, and reviewed by you for sign off at each step.
Ownership Transfer: Once all milestones have been delivered, the software system has been fully tested and validated by your team, all contractual obligations for both parties have been fulfilled, then the software ownership will be transferred over to you.
Service & Support: After ownership transfer, we can continue to offer our services to manage the cloud servers of your application to ensure everything continues to run smoothly. If you run into any issues with your system, we are available to help troubleshoot with you to ensure you remain up and running. As your business and system needs evolve, we are also able to advise on modifications, upgrades, and additional modules buildouts to support your operations.
Sound interesting? Let’s get in touch so we can discuss your project!
