Water Seeks Its Own Level

Let's look through the crystal ball of physics and see how SaaS might fare in a universe full of AI

When different containers (such as narrow tubes, wide buckets, or oddly shaped flasks) are filled with water to the same height, the water level will always be at the same vertical level, provided they are connected at the bottom or open to the same atmospheric pressure. This phenomenon occurs because the pressure at the bottom of a liquid depends only on the density of the liquid and its vertical depth (not on the total volume or the container’s shape.)

Examples in Daily Life is if you have a watering can or a teapot. The spout and the main body of a watering can fill to the same level.

Or just watch this very short YouTube video below where people demonstrate:

In this analogy I pose that:

1. Software: the different shaped tubes

2. Liquid: Code (can be legacy code or “AI” models too)

3. Flask: the labour or bot or work.

AI Is the Tide that Lifts All Boats including $CSU’s

I’d like to think of software in the world of AI the same way on 2 fronts:

1. That AI is the tide that lifts all boats equally.

   1. AI Models connected to some kind of UI and data layer will help it get to the same “level” as others and then you’re just competing on a level playing field again

2. Software is the container here — quite literally in many ways, of code, of UI, or workflows — that then houses the needs, wants and limitations that users experience.

Taking this example further, let’s take each of the columns as similar what Constellations Software’s VMS are — custom build solutions build for their vertical housed in these unique configurations.

I think in this scenario $CSU will do just fine. They will compete, albeit more ruthlessly and more because of their tech debt that their newer vibe-coded competitors might not need to deal with. This is offset by the customer marketing and sales new upstarts will need to do in order to get their compounding going.

In an Emergency: Break Glass

What pundits think about the advent of AI (inclusive of the most recent ClawdBot) is that AI will be more like either no need to build the tubes or flasks at all (or the container even) and instead it can live right in the flask.

AI has unlocked the ubiquity of tools. It’s like someone coming in and breaking the glass.

Now people or other bots can create the container it is in and create the liquid too at the same time.

I tend to think this is throwing out the baby with the bathwater thinking.

Part of the reason I say this is because I ask myself these two key questions:

1. Will we still need a container? (I think the answer is yes especially for execs, legal, compliance, regulatory heavy industries which requires what I call supervisory decision making or reviews.)

2. Are controls with boundaries still mission-critical? I think so. Having the ability to achieve an outcome is one thing, but it needs to be risk-managed. In the event the some automated event has adverse outcomes, you need the ability to recover well, retrace ones steps, understand fault and mitigate against failures next time. Mission critical software like $CSU’s rank and file need these.

VMS will Find It’s Level as the Dust Settles

Here’s my opinion loosely held: I believe that software that caters to vertical markets and are mission critical will be able to do just fine in a world awash with AI.

We already see it. AI in 2030 will be like water — I mean literally think about it. AI will be a commodity, connectable intelligence at scale — in many ways it already is.

Connecting to it means that what is left to compete against is still eyeballs (i.e attention), distribution, peace of mind and ability to save on hassle. Those are the most important things to B2B customers.

And I think in a world where software become net more intelligence by 2030 and people are still using it to run these business depts then I think $CSU will do just fine.