SaaSpocalypse continues

Nearly $300B wiped out in European markets this week. This is an adapt or die moment.

The “SaaSpocalypse” continues, and it’s a bloodbath. This week, it wiped nearly $300 billion in market value off the European stock market.

Professional software and data platforms like RELX and Thomson Reuters suffered double-digit plunges, while professional learning and development giant Pearson saw its shares slide as much as 8%. Sage, an accountancy and payroll software provider, found themselves down 10%.

The catalyst is largely thought to be Anthropic’s release of 11 open-source “agentic” plugins for Claude Cowork. This week, they published a Legal Plugin that automates contract review and NDA triage directly on GitHub. The thesis is that a general-purpose model, when properly configured, can perform high-value professional workflows that companies used to pay millions for via specialized SaaS subscriptions.

This is just the beginning.

I believe the trend is becoming clear: software is going custom (away from one-fits-many) and for many, moving in-house (expect more AI job positions). When an AI agent can read your company’s specific “playbook” and database and execute tasks across your own data, the need for a middleman software provider evaporates.

If a SaaS company doesn’t have a proprietary moat (e.g. around unique, non-public data or a collaboration layer that is impossible to replicate), it is effectively a feature waiting to be absorbed by a plugin.

The Reckoning of Lofty Valuations

For a decade, SaaS valuations were treated as “invincible fortresses” of recurring revenue, powered by the late-stage cycle of the cloud era.

The truth is:

• Use cases aren’t disappearing: Companies still need to review contracts and train employees.

• Value is shifting: The value of buying high-margin software to do these tasks is falling fast

We are in a classic tech cycle, but this one is more brutal than most in its speed. This is the “adapt or die” moment for legacy SaaS. If SaaS companies can’t reinvent themselves as more than just “workflow wrappers,” their valuations will continue to fall off a cliff.