the diginomica network pulse - what CIOs actually think about AI and the SaaSpocalypse

In the early days of cloud computing, it became the vernacular that the entire enterprise IT estate would move to the cloud. What materialized was a mixed environment where the cloud is a significant element of enterprise technology, where private and public clouds co-exist alongside a decreased, but vital, on-premise estate according to the needs or regulations of the sector.

In recent months, a similar vernacular has appeared whereby the Software-as-a-Service (SaaS) pillars of enterprise technology would be swept away by AI, dubbed the SaaSpocalypse. This theme has been fed by the sentiment of Wall Street traders, despite impressive returns by major vendors. So, just as with the rise of cloud computing, AI will become part of the enterprise IT landscape, but that picture will be mixed, including SaaS as well as AI. This is not my opinion, but the nuanced picture our network of CIOs and CTOs tells us in our monthly pulse surveys.

Over a quarter (38%) of the community members who took part in the pulse survey see AI as a direct replacement or competitive threat to existing SaaS technologies in the enterprise. That could lead to a significant disruption to the SaaS marketplace over the next 12-24 months. SaaS vendors are therefore going to need to increase their engagement with CIOs and CTOs, whilst also investing in research and development R&D on AI. Our research shows there is ample opportunity for SaaS vendors, almost half of the CIOs surveyed (40%) plan to increase their SaaS spending, which is driven by the need to integrate AI for augmentation.

As organizations seek AI-led augmentation to counter a disruptive economy, AI will be considered by CIOs for its potential to reduce costs, deliver consolidation, and its ever-improving capabilities. SaaS vendors will need to ensure their technologies match these same priorities, or ensure that customer CIOs and their organizations are aware that the SaaS platform can deliver on these promises. Therefore, that increase in engagement will require improved professional services to ensure business benefits.

Our survey finds that organizations that have SaaS platform renewals coming up or in flight are most likely to also believe the capabilities of AI are ahead of those of SaaS, as one responding CIO said:

Capabilities offered by AI tools are ahead of that of SaaS. I am increasingly thinking of SaaS as the repository for data rather than the place all work is done.

This suggests that in some cases, SaaS is following the same journey as enterprise resource planning (ERP) technology. Of course, it is always different for each organization and its use case. There remains a significant majority of organizations where the ERP is far more than a repository and is, in fact, the core operating platform of the business.

Despite the sentiment of Wall Street, our community largely sees AI as a way to enhance their SaaS implementations, so we can expect to see an architecture where AI works alongside SaaS. As one CIO says:

We are using AI as a work augmentation tool and not seeing it replacing any SaaS tools yet , however I believe it will in 18 months' time.

But CIOs do have some frustrations with SaaS providers, citing high costs and inflexibility. In organizations with low margins or being disrupted by AI, CIOs and CTOs will consider AI alternatives to find that agility and lower cost of ownership. Let's not forget it was the same frustrations and business pressures that led organizations to adopt SaaS.

The addition of AI within SaaS tools is proving to be an effective way for organizations to begin their AI journey.  A number of respondents state they are “leveraging” the AI within existing products, as one CIO says:

I see AI tools as complementing our current SaaS products. Whether that’s creating additional insights, improving user experience, or connecting user journeys.

As our deep research paper into AI adoption in the enterprise revealed, AI adoption is a significant change management process, and not merely a new technology, which is making CIOs think very carefully about SaaS usage and AI, but they are watching the future with interest:

AI still seems a lot of promise rather than reality, but I can see more features starting to be released within SaaS products, so the future challenge will be working out what performs, and what licenses are needed.

Business reality

Data sovereignty was the most cited reason for a cautious approach to AI adoption. Industries with high levels of regulation, or providers of defence and creativity, are being the most careful. The abuse of copyrighted images, music, writing, and film by AI firms and users is of major concern, as one CIO says:

My company is in a creative industry, and so AI is approached with caution and is only used for 'operational' purposes and tightly controlled.

The community is concerned about the cost pressures of adding AI to the enterprise IT budget, SaaS costs increasing as AI is baked into the offering, and the state of the economy. A number of SaaS providers, the community report, have increased their costs, even when the CIO is not using the additional AI provided.

Role changes

Our monthly pulse check on CIO and CTO role changes sees continued health in all vertical markets.

Academia: North Carolina Agricultural and Technical State University has appointed Maurice Ferrell as CIO and Vice Chancellor for Information Technology, a role he takes up on May 1, 2026. Ferrell will be responsible for the institution's learning technologies, classroom tools, campus systems, network access, and cybersecurity.

Automotive: Simon Blankenstein is to become CIO for the automotive arm of Thyssen Krupp, moving across from fellow German automotive firm Huf Group. Blankenstein said of the role change:

The automotive industry is undergoing one of the most profound transformations in its history – shaped by electrification, software-defined products, resilient supply chains, and increasing digitalization across the entire value chain. I want to position IT not just as an enabler – but also as a strategic driver of competitiveness, scalability, and innovation.

Gary Foote remains in automotive’s top end, but has moved from the Haas Formula One team to become CIO of GM Performance Power Units, which is developing a US-built F1 power unit. He said of the new role:

There’s something special about starting with a blank sheet of paper, assembling the people, infrastructure, and digital capabilities that enable world-class engineering and competition. Over the coming months, I’ll be building out the digital capability across IT operations, information security, engineering software, business systems, data platforms, and software engineering.

Consumer Goods: Beverages maker Diageo has recruited Steve McCrystal as Chief Digital Information Officer. McCrystal joins from a six-year career with fellow consumer goods firm Unilever, where he was Chief Enterprise and Technology Officer. Before that, he ran global business services for pharmaceutical giants AstraZeneca.

Energy: Luxion Group, which operates a pay-as-you-go energy firm, Utilita, has appointed Georgina Owens as CTO. Owens recent career has been in gaming with firms such as Playnetic and William Hill, but she also brings media and telecoms experience. Owens began her technology leadership career in the energy sector with Centrica.

Healthcare: Independent cancer hospitals provider GenesisCare has appointed Mark White as Chief Information & Technology Officer. White joins from over eight years with the Cleveland Clinic and said of his new role:

The CITO role is an exciting opportunity to contribute to an organisation that is deeply committed to transforming cancer care and improving patient outcomes through innovation and technology.

Great Ormond Street Hospital has appointed David Newey as Chief Digital Information Officer. He is returning to the NHS following seven years with healthcare technology and services provider SCC. Previously, Newey was CDTO for Barking, Havering and Redbridge University Hospitals NHS Trust.

Legal: Law firm Kennedys has appointed Milan Devani as CIO. He joins from a 26-year career with Baker & McKenzie. At Kennedys, Devani will be responsible for a global technology strategy.  

Manufacturing: Motorhome manufacturer THOR Industries of Elkhart has created a CIO role for the US firm and promoted Ryan Biren to the role. Biren joined the firm in 2024 to develop its data platforms, and in the new role of CIO, Biren will be responsible for all IT, data, analytics, and a digital platform strategy, including the use of AI.

Public Sector: Stephen Docherty has taken on the role of Chief Digital and Information Officer (CDIO) at East Sussex County Council, a shift from healthcare to local government technology leadership for the chief information officer. Since 2014, Docherty has focused on healthcare leadership as CIO for South London and Maudsley NHS Trust for over four years, and then led healthcare for Microsoft between 2019 and 2021. In recent years, he has provided technology leadership at Solent NHS Trust, Dorset Healthcare University NHS Trust and Dorset County.

My take

Our pulse survey reveals AI and SaaS will become part of the enterprise technology mix. For providers of SaaS and AI, that means a dogged fight for some profit margins from CIOs and CTOs with a plethora of competing demands and business challenges. The pulse of the job role changes reveals that organizations are aware of this and hiring digital leaders who can navigate that mix.