The transition from old to new isn’t uniform. Each layer of the old value chain has a specific fate — and a specific timeline.
Mechanic 1: UI-to-API Collapse
Value leaves: UI layer. Value enters: Tier 1 orchestration.
Agents don’t click buttons. They call APIs. Every dollar spent on frontend becomes stranded cost. Value migrates from the presentation layer to the orchestration layer that decides what to call and when. Net effect: ~35% of SaaS application value moves to the System of Action tier.
Mechanic 2: Seat → Outcome Repricing
Value leaves: per-seat revenue. Value enters: per-outcome pricing at all tiers.
100 seats at $300/mo → 10 agents priced per outcome. The per-seat model doesn’t just shrink — it structurally changes. Harvey AI charges for legal work delivered, not seats. Agentic marketing platforms charge for campaigns executed, not marketers licensed.
Mechanic 3: Workflow → Dynamic Orchestration
Value leaves: static workflow tools. Value enters: Tier 1 + Tier 2 (plan, act, evaluate).
Agents don’t follow predetermined paths — they plan, execute, recover dynamically. The workflow layer’s value migrates to the orchestration tier (dynamic execution) and the intelligence tier (what worked, what didn’t, what to try next). Combined, this absorbs ~35% of the old SaaS workflow value.
Mechanic 4: Record → Living Context Graph
Value leaves: static SoR embedded in apps. Value enters: Tier 4 semantic infrastructure.
Data moves from being trapped inside app silos to being queryable via semantic graphs. Value doesn’t decrease dramatically — it transforms. The data becomes infrastructure rather than product. Margin compresses but essentially remains.
Mechanic 5: Compliance Creates a New Value Tier
Value created: entirely new Tier 3 identity layer (~10-15% of total stack value).
This isn’t value migrating from somewhere — it’s value being created. Enterprise agents generate a compliance requirement that didn’t exist before: every agent needs identity, permissions, and audit trails. This creates an entirely new tier of value that grows from near-zero to ~10-15% of total stack value over 5 years.
The Bottom Line
The SaaSvalue chain doesn’t collapse. It reorganizes. Value migrates from a linear, evenly distributed chain to a barbell structure — the SaaS Hourglass. Maximum value at the orchestration top (System of Action, Intelligence, Identity) and the context bottom (Dynamic Context Store). Squeezed middle (traditional SaaS applications).
The old pricingmodel — per-seat, per-user, per-month — was a derivative of the old architecture. When agents replace human operators, the architecture changes, and the pricingmodel must follow. Outcome-based pricing isn’t a preference. It’s an inevitability.
For enterprise leaders: “Who controls the orchestration layer my agents depend on?”
For SaaS companies: “Am I building toward the System of Action position, or am I in the hollowed middle hoping agents still need my UI?”
The barbelled distribution of value is the structural reality. Plan accordingly.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
