The SaaS Features Arms Race

Is it just vibe coding on steroids? Or is it getting easier to enter new markets?

If you are noticing that every software company is announcing more and more features, you are right. This is happening not only in consumer tech, but also in B2B. While Microsoft and Google’s last week’s announcements surprised many, Notion has been adding features at breakneck speed over the past few months. Glean didn’t stop at just enterprise search - it is talking all about AI agents. And so has been Salesforce.

I can go on to declare that SaaS companies are either going all in on AI, or announcing more features at a pace never seen before. There are a quite a few reasons for this:

Credits: ChatGPT o3

1. It has never been easier to build before:

   1. AI has simply cut down time in writing new code. So it is easier than ever to add new features. Devs love bulding them, Sales loves selling new offerings. The speed of new feature development is unprecedented.

   2. Copying features has become easier than before too. A single prompt has the ability to create duplicates of the most innovative solutions really quick.

   3. We have entered the age of software abundance now. Quality of code matters though, and this is where poorly built features might lead to frustration in software usage. Customer Support will have to be on their toes.

2. Revenue Retention is not just a metric - it is survival:

   1. Never before have CFOs around the world across industries have allocated budget for one single thing. In 2025, it is AI. The year is reaching its halfway mark and a lot of these dollars have already been spent on experiments, with more to come.

   2. In several companies, the $$ for this came from slashing the usual software budget. Must-have software is mostly safe, but deals are still being renegotiated to maximize value. It is a buyer’s market in SaaS now. More features might help save some of these deals.

   3. Good-to-have software are under higher pressure to showcase ROI. Adding AI or new features is buying them time this year. 2026 can be more challenging.

3. Revenue and valuation maximization:

   1. The AI experimental revenue is easier to tap into for large incumbents. They already have a foot in the door with existing happy customers. All they need to do is, educate them about their new capabilities and maximize adoption. Great time to be a CSM!

   2. The sky high valuations of mid-Covid won’t grow themselves. Public markets love growing revenue too. Existing SaaS don’t have a choice.

4. More ICs, less managers:

   1. “Founder mode” is in vogue, which is leading to faster decision making across software companies. Really good employees are able to do more in the same time with the help of AI. This makes initiatives move faster. It is getting easier to clear backlogs as well.

   2. Middle management might feel that they are under threat. But I am optimistic that it is just temporary. By getting more hands-on with AI and understanding the boundaries of AI capabilities, might actually give them bigger opportunities over the next few years.

Thoughts?