Kevin Mannion posted on LinkedIn on October 22 that SaaS now looks more like a managed service than a subscription, because your customer wants their version of your product and knows you can build it. His words: “Agentic or not, it looks more like a managed service than a subscription.”

He backs it with two numbers. I went and checked both.

What I found is that the three giants do lose money on services, and they also hand a growing share of that work to outside partners. If you run a software company of 20 or 200 people, copying only the first half will get expensive.

What the three annual reports say

Mannion names Salesforce, ServiceNow and Workday. I opened the latest 10-K from each on the SEC site.

Company	Period	Professional services
Salesforce	fiscal 2026 (ended Jan 31, 2026)	revenue $2,137M, cost $2,474M, loss $337M
Workday	fiscal 2026 (ended Jan 31, 2026)	revenue $719M, cost $790M, loss $71M
ServiceNow	calendar 2025	gross loss of 5% (2% in 2024)

The facts hold. The cause he implies, embedded engineers, fits two of the three. Salesforce’s loss grew almost eightfold in two years ($44M in fiscal 2024, $229M in 2025, $337M in 2026). ServiceNow’s rose, and the company says it expects the percentage to rise again in 2026. Workday goes the other way, from $84M to $71M over the same stretch.

Size matters too. Services are about 5% of Salesforce’s revenue and 7.5% of Workday’s. Think of it as customer-acquisition cost. Salesforce says as much: “our professional services organization facilitates the adoption of our service offerings, helps us to secure larger subscription revenue contracts.”

The 800% I treat more carefully. Mannion credits an FT analysis of Indeed data. KDnuggets repeats it (monthly forward deployed engineer listings up more than 800% between January and September 2025), but I couldn’t open the FT piece, so I’m citing it second-hand. KDnuggets itself warns that it’s an index against a small January base on one job board. I wouldn’t build a hiring plan on it.

Who does the work

The number Mannion leaves out sits in those same filings.

ServiceNow reports what share of its services revenue goes out as cost of engagements contracted to third-party partners. It was 10% in 2023, 24% in 2024 and 35% in 2025. And it explains the 5% loss with that line: partner spend growing faster than revenue.

Workday puts it in its 10-K risk factors: “Third parties provide a majority of deployment services for our customers.”

So the big-company model is to lose money on services and also rent the capacity. They don’t keep an army of their own engineers inside every account. They keep an ecosystem of partners they pay per project.

Why copying the loss isn’t open to you

Mannion says price is your only remaining lever. I’d say he’s missing one. The other is the shape of your delivery cost.

Take a software company with forty engineers. A large customer asks for its own version. You have two roads. You can hire embedded engineers, which is fixed payroll that sits on the bench when the project ends unless you invent the next project to keep them busy. Or you can contract the capacity per project and leave payroll alone. Salesforce can afford the first because its total gross margin was 78% in fiscal 2026 and services are a small slice. You can’t.

My rule, and it comes from no source, is that when two customers ask for the same adjustment, it goes into the product and your team builds it. When only one asks, it’s project work and shouldn’t touch your roadmap.

What we do about it

That second category is IQ Source’s Technology Partner service. We’re engineering capacity for software companies: backend, web, mobile, integrations and architecture outside your specialty, delivered under your brand, with knowledge transfer so your team grows on every project. The customer stays yours. We work behind you.

We aren’t your embedded engineer, and we don’t know your customer the way you do. What we do is build the connector, the module or the screen that customer asked for, after you’ve decided it should exist.

The same line shows up in Aaron Levie’s list of agent deployment work, as I sorted it in another post. Data access, human approval and your own evals stay in-house even when you hire out the rest. Per-customer fitting works the same way. Which version of the product exists is your call. Writing the code isn’t.

My reading, and I flag it as a reading, is that your customers aren’t standing still either. West Monroe built eight tools it would have bought, so what a vendor is left being asked for is the hard part, the fitting on top of its core system. The embedded engineer is an old trade with a new name. What’s new is that the giants’ numbers are now public.

If you have a big customer’s request list open right now and can’t tell which part is product and which part is project, send it to us and we’ll tell you what we’d take and what we’d leave with your team.