Subscription commerce is facing its most consequential inflection point in more than a decade. A sharp Software as a Service (SaaS) market sell-off, fueled by fears that AI can replicate or replace software products, has rattled investors and executives alike. “Businesses are built around trust and subscriptions are just a contractual model that showcases that trust,” says Daniel Saks, CEO and Co-Founder of Landbase and former Co-CEO of AppDirect. For Saks, the question is not whether subscriptions survive AI, but whether companies evolve fast enough to preserve the value and trust that underpin them.
At its core, subscription commerce refers to the systems, pricing models, and operational infrastructure that allow companies to deliver software and digital services through recurring revenue. It includes how products are packaged, how customers are billed, how revenue is recognized, and how renewals and upgrades are managed across the customer lifecycle. Together, these elements form the backbone of how modern B2B technology companies monetize ongoing value.
Saks has spent 15 years building and scaling recurring revenue companies, most notably helping grow AppDirect, a B2B subscription commerce platform that enables enterprises to sell, distribute, and manage cloud software and technology services at scale, into a global operation serving Fortune 500 brands and millions of businesses. That experience cemented his belief that, despite investor fears that AI will commoditize software and compress margins, durable subscription models are built on sustained value delivery that extends beyond code itself. “If you provide value, businesses are willing to trust you and pay for that,” says Saks.
Recent market turbulence reflects anxiety that AI code generation can erode traditional SaaS moats. Saks contends that enduring recurring revenue companies are not reducible to code repositories but are complex commercial ecosystems, built on institutional trust, long-term customer relationships, and deeply embedded workflows that shape how organizations operate. While certain products may be disintermediated, companies that consistently deliver measurable value retain customer trust, regardless of whether pricing is per-seat, credit-based, or consumption-driven. The real risk lies not in AI itself, but in clinging to outdated assumptions about how value is packaged and monetized.
The Per-Seat Model Under Pressure
One of the most significant fault lines is the traditional per-seat pricing model. As AI agents become capable of executing workflows once handled by employees, organizations may need fewer human licenses and more machine-driven capacity. “The real disruption is the per-seat model and that’s breaking,” Saks says.
This shift forces companies to rethink not only pricing, but the infrastructure behind it. Consumption and credit-based models are emerging as more resilient alternatives, aligning revenue with actual usage and outcomes. Snowflake, the cloud data platform company, anticipated this years ago by structuring its business around consumption rather than static licenses. Others are now racing to catch up.
For established recurring revenue businesses, the bottleneck is the structural mismatch between legacy pricing and AI-driven usage patterns. Smart teams sometimes misdiagnose the problem as operational friction, when in reality the core economic model needs reengineering.
A 90-Day Playbook for Future-Proofing
Asked how he would future-proof a mid-scale recurring revenue company, Saks begins with alignment, offering a clear blueprint for leaders navigating this transition. “I would look at the value to the customer and I would want to align the value of the product experience with the monetization and pricing and the operations.”
The first move would be product-level: redesign workflows so they serve both human users and AI agents. Software can no longer assume a human operator at every step. Agents must be able to execute tasks autonomously within defined parameters.
Next comes monetization. Pricing should shift from per-human-seat structures to usage or credit models that reflect measurable output. This does not eliminate subscriptions; rather, it reframes them. Predictable commitments can coexist with variable consumption, particularly when paired with volume incentives for longer-term agreements.
Finally, operations and revenue recognition must adapt. Billing systems, collections processes, and reporting frameworks must support consumption without sacrificing predictability. Companies such as Snowflake and Stripe have demonstrated that usage-based revenue can scale effectively when supported by the right financial architecture.
The Rise of Agentic Commerce
As AI agents begin negotiating contracts, provisioning services, optimizing usage, and even disputing invoices, subscription platforms must evolve further. Support for usage and consumption pricing is quickly becoming table stakes. More advanced capabilities, including what Saks describes as an emerging agentic commerce standard, will separate leaders from laggards.
History offers a clear precedent. During the shift from on-premise software to the cloud, companies that failed to evolve declined, while those that embraced subscription models thrived. Today, another transition is underway. Firms that integrate AI into both product experience and commercial infrastructure are positioned to grow while those that resist may struggle.
However, while the potential of AI-driven automation is significant, it also introduces new and often unpredictable risks into the subscription commerce stack. Agents operating without guardrails can make erroneous or unfair decisions at scale. “We need to have agent operating procedures for agent commerce that train the agents to execute within certain bounds just like you would train humans. And then you need the right escalation or human in the loop to make sure that it’s being done in an accurate and fair way,” Saks says.
A Tale of Two Futures
Saks likens the current SaaS sell-off to earlier market corrections that ultimately rewarded innovators. Companies that adopt AI-driven workflows and evolve toward consumption-based commerce are likely to emerge stronger. Subscription commerce is not disappearing. It is being recalibrated around measurable value, intelligent automation, and trust. Contracts may change form, but enduring businesses will remain anchored in outcomes customers are willing to pay for repeatedly. “If traditional technology companies adopt new subscription commerce platforms for usage and consumption, they’ll thrive in the AI world. The ones that don’t evolve are the ones that are going to stay behind,” Saks says.
Follow Daniel Saks on LinkedIn or visit his website for more insights.
