The 3 Forces Quietly Dismantling the Business Model That Made Enterprise Software Fabulously Profitable
- Admin
- Apr 17
- 1 min read
Software stocks have been in freefall, and a new word has entered the business lexicon: "SaaSpocalypse." The thesis is that AI is poised to undermine the business model that made enterprise software one of the most profitable industries on the planet, built on high margins, recurring revenues and customers locked in by painful switching costs.
Drawing on roundtables with senior business leaders in San Francisco and New York, this Fortune piece identifies three structural forces now bearing down on that model: the vulnerability of captive markets to disruption, the collapse of barriers to entry as AI coding agents make it far cheaper and faster to build enterprise-grade software, and the rethinking of workflows that is shifting competitive advantage away from horizontal, one-size-fits-all platforms toward deep vertical expertise.
The SaaSpocalypse may be an overstatement, but the forces behind it are real. Margins will compress, pricing models will shift from per-seat to outcome-based, and the fight for control points across the enterprise software ecosystem is only just beginning.
Read here.
Authors: Michael Jacobides and Stefano Puntoni
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