Meta platforms like WhatsApp achieve Level 7 stickiness due to social network effects, where users stay because their friends and family are on it.
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The 7 Levels of SaaS Stocks (AI Kills 3)
Jun 4, 2026
The creator categorizes SaaS stocks into seven levels based on their stickiness and vulnerability to AI disruption. Levels 1-3 (Delete, Substitute, Migration) are considered more vulnerable, while Levels 4-7 are more defensible. AI is expected to impact the lower levels by offering viable alternatives or making data migration easier.
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Microsoft spans multiple SaaS levels, with Office at Level 5 and critical infrastructure like Active Directory at Level 6, making it a complex but dominant player.
SAP is a prime example of a Level 6 SaaS company, representing the financial 'guts' of enterprises with extremely difficult and lengthy migration processes.
Palantir is considered on the higher end of Level 5 SaaS, with deep enterprise and government integration making it very sticky.
CrowdStrike is placed in Level 5 due to its deep integration with enterprises and government customers, making it highly sticky.
Workday is considered on the lower end of Level 5 SaaS, characterized by high integration and organizational reliance, making switching difficult.
ServiceNow is a Level 5 SaaS company with high integration and reliance, making it dangerous for organizations to switch.
Salesforce is a Level 5 SaaS company where CIOs are hesitant to switch due to high integration, sensitive data, and organizational disruption.
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