SaaS shifts to free tools with paid intelligence layers

The traditional software-as-a-service model, defined by per-seat pricing for tools, is becoming obsolete as advanced AI models make building high-quality software significantly easier. Emerging models, including Opus 5.5, GPT-6, Astra, argon, and carbon, have lowered the barrier to entry for software creation, prompting a shift toward what is described as "SaaS 2.0." In this new framework, companies give away the core tool for free to acquire proprietary data and create network effects. Revenue is generated by upselling "intelligence," which includes AI agents that perform specific tasks or human-provided services. This approach expands the total addressable market from users of tools to users seeking outcomes. While small and medium businesses and prosumers are expected to shift toward free tools, enterprise customers may continue to pay per-seat fees for security and support, though these prices are expected to decrease over time. Pricing for the new intelligence layer can be based on tokens, pay-per-outcome, or recurring human service fees. The speaker argued that SaaS is not dead but evolving into a model where tools are free and value is captured through paid AI agents and human services, creating a larger market than the previous per-seat model.