The death of SaaS has been greatly exaggerated

Tech people speak in absolutes. What else is new...

Dear Colleagues, I worked on today’s letter in collaboration with my dear colleagues at Coatue. Check out our joint post on C:\Takes and subscribe.

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Recent discourse in the tech industry argues that AI agents — replacing human workers and using APIs to access traditional SaaS tools — will force SaaS off the per-seat model. It’s one feature of the so-called SaaSpocalypse that suggests SaaS companies must reorient around outcome or usage-based pricing, or risk death. Ramp data shows that traditional SaaS vendors have not moved to a new pricing paradigm.

A 200+ vendor panel built using Ramp Rate — including contracts for Salesforce, Atlassian, HubSpot, Adobe, Docusign, Zoom, Oracle and more — shows seat-based contracts at 65-75% of spend, flat platform subscriptions at 20-30%, and consumption-based spend stuck at 4-6%. The lines have barely moved in twelve months.

For the traditional SaaS vendors that have made early consumption-based offerings, the vast majority of spend remains seat-based. Consumption-based revenue has barely increased.

According to Ramp data, 99% of Adobe bills are seat-based. The company sells Firefly AI credits and other services, like Acrobat Sign API calls, which combined are a rounding error compared to Creative Cloud licenses.

Similarly, spend on HubSpot is almost entirely seat-based, despite the rollout of credits for its Breeze AI capabilities in spring 2025. Our data is consistent with HubSpot’s financial reports, where the company reported that less than 2% of revenue came from “professional services and other,” which includes revenue from usage-based products like Breeze.

Narratives surrounding the death of SaaS are — at best — coming too early: more of a reflection of where product leaders see the industry going rather than a decision driven by buyer behavior. That could change. It has not.

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The early childhood instinct to play with matches and candles does not suffer a diminuendo later in life.