Die Zukunft des SaaS: How the Stack Fallacy Influences GenAI Ambitions – The Disruption Dilemma (Part II)

In Part 1 of Die Zukunft des SaaS: How Enterprise Giants Defy the Stack Fallacy in the GenAI Era, we explored the Stack Fallacy, which explains why companies at lower stack layers—like cloud infrastructure or foundational AI models—often fail to succeed in customer-facing SaaS markets due to insufficient customer empathy. We also examined how Generative AI (GenAI) threatens to disrupt the Software-as-a-Service (SaaS) industry by enabling new entrants, commoditizing features, and raising customer expectations. In this second part, we analyze how enterprise giants—Salesforce, ServiceNow, SAP, Microsoft, Oracle, Workday, Pega, Adobe, and BlueYonder—navigate these challenges to lead in the GenAI era. By leveraging their higher-layer expertise, strategic partnerships, and customer-centric innovation, these companies sidestep the Stack Fallacy to maintain dominance. We’ll also delve into the broader implications for the SaaS industry and what lies ahead in this AI-driven landscape.

Defying the Stack Fallacy: Strategies of SaaS Giants

As outlined in Part 1, the Stack Fallacy highlights the peril of moving up the stack without deep customer understanding. Major SaaS providers, operating at the application layer, hold a natural advantage: they already know their customers’ needs. Below, we explore how these companies integrate GenAI to stay ahead, weaving in insights from industry reports and company strategies.

1. Deep Customer Empathy at the Higher Stack Layer These companies serve specific business domains—CRM (Salesforce, Microsoft Dynamics), IT service management (ServiceNow), ERP (SAP, Oracle, Workday), process automation (Pega), marketing and creative tools (Adobe), and supply chain management (Blue Yonder). Their decades of experience provide direct insight into customer pain points, such as streamlining sales pipelines, automating IT workflows, or optimizing logistics. A 2024 IDC report on SaaS market trends notes that 65% of enterprise SaaS success hinges on domain-specific expertise, which these players possess in abundance. Unlike lower-layer providers, these companies don’t need to infer user needs—they have direct feedback from millions of customers. For example, Workday’s HR platform uses customer input to tailor GenAI features like talent insights, ensuring relevance to HR professionals, unlike generic AI tools from infrastructure providers.

2. Strategic Integration of GenAI Rather than building foundational models—a lower-layer task prone to the Stack Fallacy—these companies integrate GenAI through partnerships or existing AI frameworks, focusing on domain-specific applications that enhance their core offerings.

3. Platform Approach and Ecosystem These companies leverage platforms and ecosystems to amplify GenAI adoption without overextending into lower layers. Salesforce’s AppExchange, ServiceNow’s Now Platform, Microsoft’s Power Platform, SAP’s Business Technology Platform, Oracle’s Fusion Cloud, Workday’s Extend, Pega’s low-code platform, Adobe’s Experience Platform, and Blue Yonder’s Luminate Platform enable customers and developers to build GenAI-powered applications. For instance, Microsoft’s Power Platform allows businesses to create custom GenAI apps for retail analytics, reducing Microsoft’s need to build every solution itself, per its 2025 Power Platform case studies. A 2023 McKinsey study on platform-based SaaS models found that such approaches boost adoption rates by 40%, showcasing their effectiveness. By empowering ecosystems, these companies sidestep the Stack Fallacy, avoiding the need to solve every customer problem directly while enabling innovation at the application layer.

4. Data Advantage and Trust Vast enterprise data repositories—customer interactions for Salesforce, financial records for SAP, supply chain metrics for Blue Yonder, HR data for Workday—enable these companies to fine-tune GenAI models for specific contexts. They also prioritize trust and compliance, addressing enterprise concerns about data privacy and regulations. Salesforce’s Einstein Trust Layer, SAP’s GDPR-compliant Joule, and Microsoft’s Azure AI security features ensure safe AI adoption, as noted in Forrester’s 2024 report on the future of SaaS in the AI era. Lower-layer providers, with tools like AWS’s SageMaker, lack these domain-specific data and trust frameworks, limiting their SaaS competitiveness.

5. Superior Product Disruption Clayton Christensen’s disruption model emphasizes “inferior” products that improve over time, but some disruptions come from premium offerings. These companies’ GenAI tools—SAP’s Joule, Adobe’s Firefly, ServiceNow’s Now Assist—deliver high-value, enterprise-grade features that reinforce their premium positioning. For example, ServiceNow’s predictive analytics for IT workflows outpaces low-cost competitors by offering superior value.

Broader Implications for the SaaS Industry

Building on Part 1, the Stack Fallacy and GenAI have profound implications for SaaS:

1. Disruption Risks for Incumbents SaaS providers that fail to integrate GenAI risk disruption by startups leveraging lower-layer AI for niche solutions. A GenAI-powered HR tool could challenge Workday with cheaper onboarding automation, as Deloitte’s 2025 report on AI in enterprise software trends predicts.

2. Opportunities for Leaders Incumbents like Salesforce, ServiceNow, SAP, Microsoft, Oracle, Workday, Pega, Adobe, and Blue Yonder thrive by focusing on domain-specific GenAI applications and partnering with lower-layer providers like xAI. Their ecosystems and trust frameworks give them an edge, per IDC’s 2024 report on SaaS market trends.

3. New Entrants and Niche Markets GenAI enables startups to target niche markets, but they must avoid the Stack Fallacy by ensuring customer empathy.

4. Customer-Centric Innovation The Stack Fallacy emphasizes customer empathy. SaaS leaders succeed by solving real pain points, like Microsoft’s Copilot for sales forecasting or BlueYonder’s GenAI for supply chain optimization, per IDC’s 2024 analysis.

The Future of SaaS

As the SaaS market grows to $315 billion by 2028, per Statista’s 2024 forecast, GenAI’s transformative power will intensify competition. Leaders who balance customer empathy with strategic GenAI integration will shape Die Zukunft des SaaS, while those ignoring the Stack Fallacy risk obsolescence. These companies demonstrate that success lies in understanding customers, not just mastering technology. The Good news is that SaaS companies are heavily invested in leveraging models. integrating data clouds, have reasoning engines, have integrated security architectures, supporting multi-model agent journeys, creating agent marketplace etc. It's well poised for the prepared!