These companies enjoy healthy margins. Unemployed engineers can duplicate the core functionality and offer it for less.
Especially for Enterprise Saas companies like Salesforce/Microsoft/Oracle/etc who know full well that their real competency isn’t actually the software…it’s distribution. Employees aren’t choosing to use those products, they get forced into them by management/IT or literal monopoly.
Sales is everything in B2B software and always has been. Product-led growth in B2B has always been fantasy erotic-fiction outside of chat/notes apps.
Then these new startups get a foot hold, and become the dominant software, grow in size and learn how to B2B sale as well.
PLG creates the distribution to actually implement Sales effectively and at scale for B2B. Even those companies that originally were purely Sales-led now have a strong PLG component. PLG is far from be a fantasy, but now it's almost a must have motion to build distribution and long term healthy business viability considering also that Enterprise software is living a consumerization moment. Not to mention that the next generations of users and buyers buy and expect software to be different from the past, this is already happening.
Is there any evidence to support this? It would imply that even their least promising employees would still pose a threat which seems unlikely.
This is still in effect, however the primary competing products at peer rivals is now “foundational ai”, and they need far less people and mostly people of a very specific skill sets of ML research, Inference Scaling, Hardware R&D, AI prompt engineering research. Also the cost to play is 10 billion minimum.
So Salesforce will perform rent seeking as long as their moat allows rather than gamble on foundational ai.
