Software stocks have been in freefall. The S&P software index dropped about 20% in February, and a new word has entered the business lexicon: “SaaSpocalypse.” The thesis is that artificial intelligence is poised to undermine the business model that made enterprise software one of the most profitable industries on the planet.
Software-as-a-service has long been an investor’s dream — high margins, recurring revenues, and sticky customers. Companies like Salesforce, SAP, and ServiceNow grew into giants on the back of that model. But the dream is starting to crack. Over the past two weeks, we co-hosted roundtables with senior business leaders in San Francisco and New York to discuss how AI is reshaping value creation. The threat to SaaS was a recurring theme — and their observations point to three structural forces that enterprise software companies can no longer ignore.
