The “SaaS Apocalypse”: Why Traditional Software is Dying

Hey everyone. Welcome back here to our day three coverage of RSA Conference. If you've been watching our feed, we just finished up Techstrong Gang, and it was a rip-roaring Techstrong Gang episode with some of my friends here at RSA.

But speaking of friends at RSA, let me introduce you to my next guest, David DeSanter. David is the CEO of Anaconda. We last spoke, I guess it was December.

Yeah, it was in Reinvent. Yeah. At Reinvent.

But David reminded me of something. The first time I met David was about six years ago, which puts us squarely into COVID time, right? It was right before the lockdown.

That was COVID. Yeah. That was COVID year.

And at the time, David was the chief product officer at GitLab. And I said, "David, I love having you here. " And he said, "Alan, GitLab is a security company, right?

We're about DevSecOps. " Interestingly, I was walking on the street yesterday, David, I see a coffee- Yeah ... cart, CloudBees.

Oh. Who I haven't heard from also in a very long time. But CloudBees- Yeah ...

selling or giving out free coffee at the security conference. So there you go. Yeah.

But David, why does this have anything to do with Anaconda? Yeah, it's a great question. So Anaconda historically is about secure Python packages for AI and data science.

Uh-huh. And a lot of customers around the world, 95% of the Fortune 500- Yes ... use that to build secure AI applications.

And for Anaconda, a combination of my security background and the mission that we've set to help organizations out, we're going to be releasing some more security capabilities this year. Like a AI model security scanner and helping with guardrails within production environments. And ultimately, Anaconda, as the company we are today, focused on AI native development, we're all about reproducibility and at scale, and that's also important with security.

If you're training a model, you want to make sure it's operating as you expect. You deploy it, you want to know if there's drift, has there been manipulation of it, and so forth. And so we're looking forward to helping move into that production side of our story, where we've traditionally only focused on the development side.

I love it. Now, but you threw some new terms at me there that I haven't associated with Anaconda previously. Yeah.

But I know you guys also recently went through a, not a reorg, that's not the word I'm looking for, but you freshened up the messaging. Yeah. Fine-tuned the mission in all of this.

And who doesn't in today's world where things are moving so quickly? Talk to us about that a little bit. Yeah.

So when I started in October, I wanted to just talk to customers and understand why Anaconda from their point of view. And over the course of a couple of months, I started realizing Anaconda focuses on the story that has been our legacy around secure open source packages, but customers were using us for other things. Not just traditional data science, but they're actually building AI applications using Anaconda.

And so we then asked ourselves, what is the future for Anaconda? And we realized that the base of our customers were now focused on AI native development. And for those not familiar with the term, there's two types of development you can do.

There's traditional software development, and then you have AI native. Traditional software development, the application code is the thing you version and release, and the AI model is an artifact. Right.

In AI native, that's been reversed. So if you look at applications like Claude, OpenCode, even our Anaconda desktop that's coming out, the AI model is the thing that is important, and everything versions off of that, and the code is now the artifact. And I think it's just a sign of how fast things are moving.

Well, but before AI, yeah, I think we thought things moved fast. Correct. What you've got here, what you just described, is 180 degree, right?

It is. Yeah. If you would've told me this three years ago, I'd say you're putting the cart before the horse.

Yeah. But now that's the world we live in, the cart before the horse. It is.

So I'm a huge fan of Lego. Mm-hmm. I think we've probably talked about it in the past.

But using the Lego analogy, AI native development is you want to build the engine first, and think about it like if you're building a robot. Then build the car around it or- Yeah. Or let's say you're building a robot.

You want to get the engine configured, built, and you know it's working, and then you add the arms and legs and the head. If you did it a different way, you'd be like shoving the engine in or having to rebuild stuff. Right.

And that's why now that's becoming the trend. I love it. And, as we were talking off camera, this was not to be an I told you so or a visionary or anything else you want to call me, but we saw this happening when we were getting ready.

Every year here on Monday we did the DevSecOps event. " It's this, I think the community, and not necessarily even the security community but the broader community, the developers community as well, the ops, the DevOps, they're coalescing around this notion of AI native Dev. Yeah.

And because we're at RSA, we made it sort of securing AI native Dev. Yeah. And that was our theme.

So I'm in violent agreement with you. I do think that is the way forward. What's interesting is what we take from that legacy stack- Yeah ...

from that legacy way of doing and, cloud native, for instance. Does cloud native go with this AI native Dev? So actually, what I'll say is that I found interesting, and then I'll answer the question, is there's a new breed of cloud provider available.

Yeah. And like Nebius as an example. Yes.

They are what they call an AI native data center. Yeah. And getting to know them over the last several weeks, they are the opposite of a traditional cloud provider.

" I think cloud native is going to become the AI native. And the reason for that is when you look at what Anaconda does with helping people deploy models securely, we're putting it into a container that's hardened, and it gets deployed via cloud native practices like GitOps or standard Kubernetes configurations. And so when looking at it, I think what we're going to see is this continual shift.

Traditional software will start to shrink down, especially as more and more agents are able to do what they need to do. And then we're going to start to see this, everyone's a builder, and everyone now has to worry about what they're doing. And to your point, you end up in now a new cloud native, like rebranded AI native, where it's just completely different than a traditional experience.

And I would say that the thing that's most exciting for me in all of that, whether it's my time at previous companies or just things I enjoy, it's really truly incredible to see the unlock. We updated the company's vision to be, deliver AI innovation at the speed of imagination. I love it.

Because today, if you think about it, you can have an idea, and two hours later you have a running app. You don't know the half of it. Two hours.

Yeah. I was giving some time to- You could have coffee in two hours. We've been on a bit of a mission ourselves at Techstrong.

We're adopting agentics and doing stuff. I saw a mistake on our homepage this morning, and I wrote to our marketing team and said, "Hey, this mistake's got to be here a long time. Why hasn't anyone caught it?

" Yeah. " Mm-hmm. No.

I went into Perplexity Computer. I fed it the old URL. " I then sent the zip file to put into WordPress.

Yeah. To my marketing. Came about 10 minutes later, fixed.

New hero image, the right logos and names. That's the world we live in today. Yeah.

It's instant. You said something, I have a lot of friends, David, who are serial entrepreneurs- Mm-hmm ... who have been multi-time, but they started as developers.

Yeah. Same with me. Very similar to your thing.

Yeah. When I talk... And some of them haven't done real development in 20 years, right?

" And that's the world we're in right now, where- Yeah ... I could build anything. And it doesn't need dozens of engineers.

It doesn't need a whole bunch of designers. Yeah. You could take a skeleton team, three to five people, and God knows what you could build.

Yeah. So I'll tell you about a little fun side project. Go ahead.

Because it fits into it. So we have a really good partnership with NVIDIA. We provide all the CUDA packages so people can build their applications on top of NVIDIA.

Very cool. And so NVIDIA launched a box called DGX Spark. Yes, the Spark.

Yeah. I'd love... Could you get me one?

I can't commit to getting you one. Okay. If you did, you'd be my friend forever.

Oh, okay. Go ahead. We'll have to work on that.

I don't want to lose the friendship. But- Oh ... what I decided to do is, how fast can I get to being up and running?

And Anaconda, we have a new desktop app coming out in May. It's in alpha. We've- Very cool ...

reached a couple people. But it can control the DGX Spark box. And so all I did was open up the new Anaconda desktop on my Mac, gave it the IP address of the DGX Spark, and then I could start to select models from the Anaconda platform to deploy there.

And when I was done deploying, I decided, well, I want to do some vibe coding. So I could use what was in the Anaconda desktop app. I decided to play with open code because it was the current popular AI- Yeah, the hot thing right now.

And we're an open core company. We support all this. " Well, I had a fully working application three hours from when I opened the boxes.

Yeah. It's crazy. " Yeah.

And it was this moment of like, it's- I could do anything ... very polished, right? It's very polished.

I've not written code full-time in 15 years. And I'm looking at this and I go, "This could be shipped," right? And I think that's why they talk about the SaaS apocalypse.

Yes. Right? No doubt.

If you're not an AI native company where you're helping build those sort of applications, that's why traditional software is dying. And so the way I look at it is, there are going to be two, maybe three types of applications in the future. You'll have the traditional ones, and those are slowly shrinking.

The last two years, we had AI wrapper- Yeah ... applications. But now you've got to do AI native.

Yeah. " Uh-huh. " Right.

Because the application itself really hasn't changed. It's just bolted on. And all that is is really an intermediary.

Yeah. Right? It's a missing link.

And they serve their purpose, right? Well We all got to understand AI better and whatnot, but they can't be the future because they're still doing it the old way. I tell you something, one of the other business units in Futurum, because we're all on this big AI push, so they asked someoneWhat are you using AI for?

Yeah. And he sent a laundry list of things he's using AI for. I didn't write this on the corporate Slack- Mm ...

because I didn't want to knock him in front of everyone. Yeah. But he's using the same applications he was before, but now those applications are empowered with AI.

They're the same applications, David. Yeah. They're not doing anything different.

That's not the AI use we're looking for. Correct. Go find some other droids.

Yeah. You know what I mean? Yeah.

And I'm going to wait till I talk to him privately- Yeah ... to tell him that's not really AI use. I'm sorry.

Yeah. But, I think you're dead on. Let's bring it back to Anaconda now, though.

Yeah. You gave up... I don't want to get you in trouble, so let's just...

May, which is just two months. Yeah. So in May, it's- We've got Anaconda Desktop.

Yeah, the new desktop. So we currently have two desktop applications, two separate things. It's all pulled together, plus all the power of our platform, which we shipped last year.

And when we talked at re:Invent, we announced a second module, which is AI Catalyst, which is the curated open source models that we've security tested and performance tested and made available. That comes out in May. Similarly, we're also doing another release of secure AI packages.

We'll have 40,000 new wheels packages available to- Wow ... Anaconda customers. We will- Also May?

Also in May. Okay. Also in May.

And there's a couple other small things that will probably come out too, but those are the two big things we're excited about. And then around the fall, we'll be bringing out some of the security capabilities I mentioned, the AI model security scanning. We're looking at securing production AI in that AI native development world.

Uh-huh. And then we're deepening our relationship with some of the cloud providers and with Nvidia, of course, and so there'll be some things around that as well, to kind of give people the sense of the reach of Anaconda. And I did not fully understand and appreciate this initially, and now that I've been with the company six months, we have 50 million users worldwide, two million contributors to our open source projects, and one of the most healthy open source communities I've ever seen.

And I've done a lot of open source over my career. Yeah. And so the power of all of them has really gotten Anaconda, we'll say, marketed across their companies, across teams.

They've got user groups. But the things that sometimes just don't jump out to people is Anaconda also provides an analytics engine for Microsoft Excel. And so if you're in Excel and you want to do scripting and do some functional calls, that's Anaconda, right?

And so Anaconda is really, truly the foundation of modern AI, and our goal is to help everyone be able to achieve their goals. That imagination, speed of innovation. It's...

No. Yeah. It's innovation at the speed of- Speed of imagination.

Yeah. Which is, if you think about it, innovation is your imagination realized, right? And so- And it's powerful.

Yeah. Really powerful. It's a very powerful statement.

Yeah. And as we- Good work, man ... keep on pushing and expanding our platform, it'll only get more exciting for users all over the world.

You know what I always tell people, Dave, is you can tell how successful a company is by the passion that their leaders speak about it. And I hear the passion in your voice, and that's a great thing, man. Yeah.

It is. Yeah, no. Thank you.

Yeah. For everyone who's not super familiar with Anaconda, it checks all the boxes of all the things that have been important in my life. Open source, broad community, security, and like I said, we're doing more of that.

It's also... Look, you've heard of Python. If you've heard of Python, you've probably done something with Anaconda, right?

That- Almost definitely. Yeah. Right?

And I'm going to tell you, so I've been on my own little- Yeah ... island doing things, and I'm not a Python... I'm not a coder.

I'm a business... But this vibe company is crazy, and I am amazed. Even when I call out agents, and it tell...

You know that- Yeah. Yeah ... great thing about these agents, they tell you what they're doing, and you- Yeah ...

they're all just spinning a Python script. Correct. And that is the underpinning of the whole damn thing.

Yeah. It's great. You didn't mention the website, though.

Yeah, I was going to give a couple plugs for things. Go ahead. com, and you'll see everything we're doing and a lot of good customer use case stories.

Zimpler Bank just did one where they said they've reduced fraud by 90% leveraging- Really? Anaconda's AI platform. That's amazing.

So those are there. Read those. One last other one that's a favorite, and I think you'll love this one too, McGill University researchers- Sure ...

found a drug replacement for a drug that costs $10,000 a month, one pill, $10,000 a month, $10 alternative- Wow ... leveraging Anaconda, that research, so... So that's where stuff gets real.

Yeah. And so I'll say check out the website, look at what we're doing, read the use cases. There's way more than those two.

Please go check out our blog. We've been posting what we're working on. Sometimes we're also posting some videos of it.

The Anaconda desktop app will start showing up there as we get closer to the release, and it's just a great way to kind of stay on top of everything. And of course, also follow us on social media. The DGX Spark stuff I actually posted on LinkedIn.

Really? Actually, you've reacted to it. I follow you, yeah.

Yeah. But you can really see what we're doing because as much as Anaconda is a 472-person company, our reach is so broad- Spoken like a real CEO there. Yeah.

Really broad. And to your point, it's a great end to it. And the plugging components, everyone meets Anaconda in some sort of way in their life.

You mentioned- Right ... one way. If you've had to do a report in high school, a friend's daughter just used Anaconda to finish her econ class in high school.

Really? There's people who do their research. Friends who've done their PhD, they did Anaconda to get that done.

So it's very wide, very big, but we are truly making a big difference for enterprises and organizations around the world. I love it, man. I love it.

David, congratulations. Yeah. Keep up the great work.

And you are a security company, too. Yes. We'll go with that.

And what I'll say is we don't necessarily want to be the big security player- Yeah ... but we want you to be secure by default, so... Well, because security needs to be built into everything, and that's something we've preached for a long time- Yeah ...

anyway. Anyway, hey, man, always a pleasure seeing you. Yeah.

Great catching up. Go check out Anaconda. David's like this, I know from his past experiences.

He's got so many things going on. Don't blink. We're going to take a break.

We're here live all day. We'll see you soon. You're watching Techstrong TV.