Understanding AI’s Economic Impact: A Patience Approach

February 5, 2026 Leave a comment

This is a position / discussion paper I finalized in January 2026, after thinking about it and using it in workshops throughout 2025. I am influenced by some really smart people (RSPs), and some really optimistic people (ROPs) about the AI Opportunity. While I do not see a ‘bubble’ in the strictest and likely most-accepted definition, I did (and still do) see that justified adoption is the biggest unknown with regard to revenue and eventual profitability that justifies the current build-out.

Enough about this .. here’s the paper as it evolved through 2025 (after reviewing for relevance, given the year turning to 2026 while I wasn’t looking). Discuss!

Executive Summary

Artificial intelligence is real, useful, and increasingly embedded across the economy. However, its current market narrative is narrow and fragile, driven by a small number of dominant technology firms. As AI adoption decentralizes, where it is shifting from purchased products to internally built capabilities, the broader economy may benefit even as technology vendors face margin pressure and compression of earnings multiples. This dynamic favors patience over prediction: not a sudden collapse, but a slow erosion of valuation driven by persistent uncertainty and diminishing AI-based revenue capture.

Disclaimer: This paper reflects personal observations and market perspectives for discussion purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. All views expressed are subject to change without notice, and readers should conduct their own analysis or consult a qualified financial professional before making investment decisions.

Overview

The current market debate around artificial intelligence often frames the question incorrectly: Is AI a bubble, or isn’t it? That binary framing misses what is actually happening beneath the surface. AI is real. It is useful. It is being adopted. But the way it is being adopted matters more than the headlines suggest. This is not a call for a crash, nor a rejection of AI. It is an argument for patience, and for recognizing that uncertainty itself can erode value over time.

Discussion Points

  • Today’s AI narrative is being driven by a small handful of very large companies. That does not make the narrative wrong, but it does make it fragile. When index performance depends disproportionately on a few leaders, markets become less resilient to shifts in belief, even as benchmarks appear strong.
  • Much of today’s apparent AI growth is circular. Capital expenditures at one megacap become revenue at another, creating the appearance of broader demand. This dynamic can persist for long periods, but eventually raises questions about true return on investment for companies that are not directly a part of this growth loop.
  • Historically, bubbles do not burst during the buildout phase. They unwind when buyers stop believing the ROI story, and not necessarily when the technology isn’t working as well for them as they expected. The more plausible risk today is not a sudden collapse, but a gradual erosion of enthusiasm for adoption and deployment, resulting in contract negotiation impacts.
  • A key shift underway is that many companies are adopting AI internally rather than purchasing expensive, finished solutions. This decentralization increases productivity and efficiency more broadly across the economy, but does not guarantee sustained revenue growth for large-cap AI vendors.
  • As technology becomes a baseline company capability rather than a premium product, pricing power erodes. This disproportionately affects software and platform companies whose valuations depend on centralized monetization, while non-technology firms may quietly benefit from productivity, cost savings, and enhanced capabilities.

The present environment is defined less by fear than by unresolved uncertainty .. policy uncertainty, trade uncertainty, and unclear timelines for AI return realization. Markets can reprice known risks quickly, but prolonged ambiguity caps upside and encourages rotation rather than commitment. The likely outcome is neither a dramatic collapse nor a triumphant continuation of the current narrative. It is a slow burn, where enthusiasm fades, uncertainty persists, and valuation does the work. In that environment, patience and effort are not passive .. they are strategic.

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SaaS-Based Payroll: Streamlining Workforce Compensation in the Cloud

March 10, 2025 Leave a comment

Thank you for reading! Please see “Why 5W?”  for context, methodology and disclaimers.

SaaS-Based Payroll Overview

Managing payroll is a critical yet complex process for businesses of all sizes. SaaS-based payroll solutions offer a cloud-native alternative to traditional, manual payroll systems, providing automation, compliance, and seamless integrations with Human Resources (HR) and Enterprise Resource Planning (ERP) platforms. By leveraging cloud technology, organizations can process payroll accurately, reduce administrative burdens, and ensure compliance with tax and labor regulations—all without maintaining costly on-premise infrastructure.

SaaS-Based Payroll Business Benefits

Companies adopting SaaS-based payroll solutions can expect:

  • Automated Payroll Processing – Reduce manual calculations and errors with real-time processing.
  • Regulatory Compliance – Stay updated with evolving tax laws, labor policies, and compliance requirements.
  • Scalability – Adapt payroll operations for businesses of any size, from startups to enterprises.
  • Seamless Integration – Sync payroll with HR, time tracking, and financial systems for efficiency.
  • Cost Savings – Lower administrative costs by reducing manual effort and infrastructure expenses.

SaaS-Based Payroll Capabilities

A robust SaaS payroll system should include:

  • Automated Payroll Runs – Calculate wages, deductions, and taxes with minimal human intervention.
  • Tax Filing & Compliance – Generate accurate tax reports and submit filings in compliance with local regulations.
  • Direct Deposit & Payment Processing – Enable secure and timely payroll disbursement via multiple payment methods.
  • Employee Self-Service Portals – Allow employees to access pay stubs, tax forms, and update personal information.
  • Analytics & Reporting – Provide real-time insights into payroll expenses, tax liabilities, and workforce trends.

SaaS-Based Payroll Use Cases

  1. Small Business Payroll Management – Automate payroll for growing teams, reducing administrative time and costs.
  2. Multi-State & Global Payroll Compliance – Ensure adherence to payroll regulations across different jurisdictions.
  3. Contractor & Gig Economy Payments – Seamlessly manage payments and tax reporting for freelancers and gig workers.
  4. HR & Payroll Integration – Sync employee data across HR, benefits, and time-tracking systems for accuracy.
  5. Payroll Processing for Remote Teams – Ensure timely salary payments across multiple locations and currencies.

SaaS-Based Payroll Providers

Several providers offer SaaS-based payroll solutions, enabling businesses to optimize their payroll processes:

  • ADP Workforce Now
    A cloud-based payroll and HR platform designed for businesses of all sizes, offering automation, compliance tools, and seamless integrations.
  • Gusto
    An intuitive payroll solution catering to small and mid-sized businesses, with built-in benefits administration and compliance support.
  • Paychex Flex
    A flexible payroll system with tax filing, direct deposit, and workforce analytics, serving businesses of various scales.
  • Rippling
    An all-in-one workforce management system that integrates payroll, benefits, and IT for streamlined employee administration.
  • Workday Payroll
    An enterprise-grade payroll platform that offers real-time reporting, global payroll capabilities, and compliance management.

SaaS-Based Payroll Audiences at Target Companies

SaaS-based payroll solutions provide value across multiple roles within an organization:

  • HR & Payroll Managers – Automate payroll processes, reduce errors, and improve employee satisfaction.
  • Finance & Accounting Teams – Gain better visibility into payroll expenses and tax liabilities.
  • Small Business Owners – Simplify payroll without hiring dedicated HR personnel.
  • IT & Operations Teams – Ensure seamless integration with business applications.

Conclusion

SaaS-based payroll solutions eliminate the complexities of payroll management by automating processes, ensuring compliance, and reducing administrative workload. Businesses that leverage these platforms benefit from scalability, efficiency, and cost savings, while employees enjoy seamless access to their payroll information.

From a Technical Sales Strategy (TSS) perspective, positioning SaaS payroll solutions effectively involves:

  • Clarifying their value to different stakeholders (HR, finance, IT).
  • Addressing objections related to security, integration, and cost.
  • Highlighting measurable business benefits such as automation, compliance, and accuracy.

As organizations continue to shift to digital workforce management, SaaS-based payroll solutions provide a competitive advantage by simplifying payroll operations and allowing businesses to focus on growth.

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