AI is Irrevocably Changing the Tech Landscape

And You Are Going to Need a New Map

The “SaaS Apocalypse” is beyond a meme – it’s also shaking up the market.  And whether you believe it is over-blown and established software companies can recover, it is a wake-up call on thinking out of the box around AI’s potential impact.  

Estimates are that close to a trillion USD will be erased in market cap for the exposed “traditional” SaaS companies.  But this transition from subscription-based software to AI-native, agent-driven systems is not only breaking down SW stacks – it’s impacting and morphing entire interconnected ecosystems of tech, data, and end-customer experiences.

For decades the tech model and architecture has been to add more tools, more layers, with more integrations. But AI is now driving a bigger question: what if the future isn’t a taller stack, combined and interacting with other stacks? What if it’s a different architecture altogether? What if entire software categories, and their ecosystems shift in terms of dataflows, processes and relationships? How do we stay nimble and seize what inevitably will be a set of new opportunities and openings?

It means starting to think about these fundamental changes:

Goodbye Walled Gardens

AI is catalyzing software to become more modular, away from walled gardens to interoperable, API-centric, AI-first architectures.  

This moves away from inflexible, “all-in-one” suites toward an elastic, modular architecture.  Data becomes a less fragmented asset moving between systems, and more of a shared fabric that enables tools, AI agents, and humans to operate in real-time without integration bottlenecks.

This has massive implications not only at “stack” level, but across an entirely new and emerging ecosystem of interconnected players, data, processes and categories. 

How do we map and understand what the new ecosystems look like?  Who and how are the new players and categories emerging?  Where are the new opportunities for nimble players to target and attack?   

Take a step back and consider how this rapid evolution is unfolding.

Shift from “Buy” to “Build”

AI is disrupting software ecosystems by shifting from manual coding and tool-driven workflows to automated, agent-centric systems.  This fundamentally changes how software is built, sold, and used. This transformation is not only about incremental improvements, but rather a hard reset that lowers the barriers to entry for software creation, increases competition, and puts pressure on established SaaS businesses.   It also massively impacts on the current, established set of interconnected players in the supporting ecosystem.  

If you think about how we currently visualize the software and set of players, we have become very used to crowded app and software landscapes, that are grouped into major categories (those red and yellow labels below):

And we then chose the “best of breed” product within each category, to construct our own software and capabilities stack.  Silos connected to other silos with middleware and other tech plumbing.  A company’s basic architecture has looked like this for a couple decades:

One of the biggest (incremental) gains to this was the opportunity for SaaS players to create a Hub and Spoke model, with their platform (for example Salesforce), then connected and enhanced by its AppExchange (over 9,000 pre-built apps).

But, and this is a very big but, it is still a monolithic stack, with an API-centric model.   

Now look at today and the massive re-think underway.  AI agents can bypass established software interfaces and connect directly to backend data via APIs.  This commoditizes the front-end SaaS experience, and leaves “software platforms as some of the most exposed to AI disruption”.  And think about those 9,000 apps in the above as well.  

It also means reduced development time.  Coding assistants such as Claude Code or GitHub Copilot enable rapid application development, reducing development costs and times significantly.   Companies can embark on internal modernization initiatives, using AI to replicate the functions of specialized SaaS tools internally, reducing reliance on third-party vendors.   This will, most likely, lead to faster vendor switching, and reduce the stickiness of traditional software. 

The entire tech landscape is being impacted, and begs the question: what will the new tech ecosystems look like, and what are the new, key categories that will emerge?  

If you have lingering doubt and that the Empire Can Strike Back, and some semblance of the status quo will remain, then consider this.   It’s not just the software ecosystem that is radically morphing.  On the hardware side, we are witnessing a massive change in strategy for the chips at the very guts of our technology:

A Major Tech ARM is Morphing

The device – laptop, smartphone, or even iPad that you are reading this on, has 80 to 90% of its processors with some connection to the company ARM.   ARM built its entire strategy around their ecosystem approach, providing the systems-on-chip design and blueprint, tools, processes and even relationship brokering for competitors to work with each other.  They have dominated this chip design (and royalties) as the leader of the “Processor IP” category.  And they had one sacrosanct rule – “don’t produce any chips ourselves” and thus don’t compete with its customers. So, a Samsung and Apple could do joint chip development enabled by ARM’s category, and ARM would play a neutral role….until now.

ARM is transforming its ecosystem strategy from solely licensing intellectual property to now designing and selling its own production silicon. This is a huge change and pivot.  It means that they will directly compete with its long-standing licensees, including Intel, AMD, and Nvidia, who have traditionally used ARM blueprints.

The gravitational pull from AI was so strong, it completely altered ARM’s key moat – its ecosystem to now “focus on AI and high-performance compute”.  The strategy pivots ARM toward becoming an AI platform company rather than just a CPU designer. 

This will have major supply chain impacts. With ARM’s increased control over both design and production it will lead customers to reconsider their licensing strategies, and to look at alternatives like open-source RISC-v.

New Ecosystems and New Categories

These massive changes to ecosystems and category disruption challenge leaders to rethink the landscape they are playing in.   What categories are likely to be disrupted?  Am I investing with the right partners and technologies, or am I using capital up in dead-end players and categories?

For SE Asian innovators, start-ups and growth scale-ups, this is an unprecedented opportunity.  For decades, tech sectors such as software have been dominated by western (mostly USA) players.   Those cards are now not just being shuffled, they’re being thrown up in the air.   This is massive opp for SE Asia’s nimble players with the status quo being broken up, and new ecosystems and categories forming.

And Remember: 
“In a Gold Rush, Sell Shovels”

In many ways it feels like an “AI gold rush” with so many players rushing in.  But remember it was the players who provided the tools and support (picks, shovels, durable denim clothing, the provisions store….) that made the real fortunes from the 1849 gold rush.  

Many of the gold prospectors failed – much akin to the predictions that many of the AI players will fail and only a few will make it big.   But it’s a surer bet on the ecosystem of related services, products, processes, dataflows….that will see huge upside.  

SE Asian companies are finely attuned to thinking about their ecosystem strategy because domestic markets aren’t large enough to enable scaling to take on the global leaders.   So cross-market relationships, channels, alliances, have always been part of the core strategy and thinking.

With that in mind let’s seize this window of opportunity, and re-think around:

Where will the new categories emerge and how can I position to lead and dominate there?

How do I map and understand the shifting ecosystems?

Carpe Diem.  Start planning your shovel store.