Salesforce Earnings Highlight Critical Choices Facing Legacy Software Firms

If AI is an unstoppable force, SaaS wants to be an immovable object. And investors are looking to the software giant from San Francisco’s biggest building to decide whether the industry will crack under AI’s pressure or just sway around a bit. 

Salesforce shared mixed fourth-quarter earnings yesterday. Revenue rose an expected 12%, boosted by software sales from Informatica, which Salesforce acquired in November. But Salesforce’s sales and services products, its two biggest lines, slightly missed expectations. The company expects revenue from the fiscal year that ends in January 2027 to be in line with estimates at $46 billion and said it’s on pace to hit $63 billion in fiscal 2030, surpassing Wall Street’s forecast. 

But investors still worry SaaS may be a dead man walking. 

Last Software Standing

Salesforce’s stock has fallen about 37% over the past 12 months as investors convinced themselves that the AI wave would knock out legacy software sellers in the near future. Other software companies’ shares were battered too, with Atlassian and DocuSign falling 74% and 47% respectively over the past year. Anthropic’s recent release of Claude Cowork, an AI agent that performs tasks similar to some SaaS companies’ core products, accelerated the slide.

In response, SaaS companies aren’t trying to beat AI startups. They’re joining ’em:

• Salesforce has tapped Anthropic’s Claude to boost its Agentforce platform, an AI tool that surpassed $800 million in sales in the fourth quarter, up from $500 million the quarter before. Salesforce called it the company’s “fastest-growing product ever.” Agentforce has mostly been sold to Salesforce’s existing clients, making it an upsell within its customer base. Salesforce isn’t just earning money with AI, it’s also saving it. The software company laid off 4,000 customer support roles this fall after saying Agentforce made its own workflows more efficient. 
• Anthropic announced on Tuesday that it was integrating Claude Cowork into a host of SaaS tools, including Salesforce-owned Slack, DocuSign, and Intuit. The tie-ups could be a sign that AI will work in conjunction with, rather than eliminate, legacy software. Anthropic itself uses tools from Workday and Salesforce, venture capitalist Bill Gurley told CNBC. 

More Isn’t Merrier: Goldman Sachs expects the software biz to keep growing, expanding by as much as 45% by 2030. However, the bank also predicts that AI tools will eat much of that growth, potentially stealing away legacy SaaS companies’ share. More than 60% of the market could shift toward agentic AI. But that’s unlikely to happen overnight. Customers are more likely to slowly consolidate tools, negotiate contracts, and limit usage of old-school software. Software companies could be slowly eroded, rather than quickly replaced. However, if legacy SaaS companies like Salesforce can instead carve out a place in the workflow that’s integrated with new AI tools, they could grow alongside AI rather than be stunted by it.