The winter of 2025-2026 was a brutal season for the software industry.
What analysts came to call the “SaaSpocalypse,” a months-long compression of software valuations driven by existential fears about artificial intelligence, shook the confidence of executives and investors who had long treated the dominance of enterprise software as a given.
Their anxiety raised profound questions for the industry, most notably: If AI could automate the work of entire teams, would companies need far fewer software licenses?
By April, a tentative recovery had taken hold amid analyst upgrades and ServiceNow’s disclosure that its AI platform had reached a $1 billion annual contract value run rate. The iShares Expanded Tech Software Sector ETF (IGV) had its best week since 2001, during the week ending Friday, April 17.
It was against this backdrop that CEOs of best-in-class global technology companies, along with senior decision makers from the world’s most active public and private investors, gathered in San Diego on April 14 and 15, 2026, for the Jefferies Private Growth Conference.
We sat down with several conference participants to get their thoughts on the state of the software industry and whether its recent rebound represented a durable turning point.
Brent Thill, Managing Director, Software/Internet Research at Jefferies:
The software industry, once among the highest multiple sectors, now has the lowest multiples on Wall Street. That’s because many believe the death of software is here and that two companies will eventually dominate us.
We think that is simply wrong. Many companies are thriving in AI across different models, from consumer to enterprise. They’re building vertical models for health care, government, retail, and automotive. We think that if you speak the language of those industries and integrate AI into a workflow, there’s an incredible opportunity ahead.
In the long run, AI and the traditional software world will coexist in harmony. Ultimately, many legacy software companies will partner with new companies, such as OpenAI and Anthropic, to enhance their solutions. The enterprise companies we cover have some of the largest distribution footprints in tech, and they can leverage those channels and their data.
Zeb Evans, Founder and CEO of ClickUp, the first Converged AI Workspace, replacing 20+ siloed tools with one AI-native platform where every workflow runs on full business context
I believe much of the talk about the death of the software industry is overblown. I think it’s ridiculous to assume that everyone will build their own software for everything. If building software isn’t your focus, why would you build it? If that were the case, why doesn’t everybody build their own website now? We’ve had website builders for decades, and they are still with us.
Jason Greenberg, Co-Head of Global Technology, Media and Telecom Investment Banking at Jefferies
Many incumbents and emerging companies are presenting new solutions that harness AI to develop markets and create opportunities. If you look at the software market from 2000 to 2025, as it shifted from a premise-based to a cloud-based model, the overall opportunity grew sevenfold.
And that’s in a world where software was primarily competing for a percentage of tech spend. Now, AI-enabled software is competing for a portion of labor spend. So, you could certainly see a 20x increase in the market’s overall size.
What does that mean? It means there’s plenty of opportunity for an amazing number of new startups to achieve billion-dollar-plus outcomes in very short periods, while incumbents’ vendor sets remain intact. So, there are plenty of reasons to be optimistic and bullish after we get through this initial stage of fear.
Gaurav Kittur, Managing Director, Global Co-head of Internet Investment Banking at Jefferies
These AI tools have become so accessible that people out there who may not have a technical degree but have creative ideas for an app or software application can now create and monetize them. This will create an environment with more applications and software.
Meanwhile, companies are spending a lot of money on CapEx to train models, and those models will be incredibly intelligent. They already are, but they’ll be even more so. And they are democratizing intelligence. Everyone will have access to it and be able to integrate it into their apps. So, you’re going to see a lot of innovation and creativity around vertical applications.
Evan Osheroff: Managing Director, Software Investment Banking at Jefferies
I have been doing this for almost 20 years, and this is the weirdest, hardest, most challenging time I’ve seen in software. Even during the great financial crisis and COVID, some deals were getting done. Right now, there’s almost nothing happening.
Why? If you read what many investors are saying, there’s no terminal value in any of these companies, which I disagree with as a software banker.
At the same time, if you’re in private equity, you need financing. There’s effectively no credit market right now, or at least nothing reasonable. Anyone who needs financing and doesn’t have the capital to pay all cash can’t close a deal.
Amidst all this, people overlook that enterprises with software in place for decades do not rip it out overnight. Companies are not going to naturally trust an AI-native business that didn’t exist three years ago.
I am very much in the camp that AI will enable job creation and accelerate and enlarge economic output. There will probably be a trough with short-term pain. But it will be a long-term gain.
