Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Between mid-January and mid-February 2026, screens across trading desks on Wall Street and Sand Hill Road went red simultaneously. Roughly $1 trillion in market capitalization bled out of software stocks in that span. Portfolio managers who had spent a decade telling LPs that software was the safest bet in technology were suddenly fielding calls they didn’t want to answer. The S&P North American Software Index posted its worst monthly decline since the 2008 financial crisis. The iShares Expanded Tech-Software ETF (IGV) dropped more than 30% from its September 2025 peak.
Then came the number that made CFOs put down their coffee. For the first time in the modern era, software companies traded at a discount to the S&P 500, not a smaller premium but an actual discount. The market was delivering a verdict: we are no longer sure the business model works.
This was a structural repricing. The SaaSPocalypse (a term coined by Jefferies equity trader Jeffrey Favuzza and quickly adopted by Forrester, SaaStr, and the financial press) was triggered by the rapid maturation of AI agents that showed in production, that autonomous software could perform work that previously required humans sitting in front of SaaS applications. If an AI agent can handle pipeline management, the customer needs fewer Salesforce seats. If it can resolve support tickets, fewer Zendesk seats. If it can manage sprints, fewer Jira seats. The per-seat licensing model that built the $300 billion SaaS industry was suddenly and visibly under structural assault.
Picture a ballroom in Miami, March 2026. Orlando Bravo, co-founder of Thoma Bravo (the most prolific PE acquirer of software companies in history, managing over $183 billion in assets across 77 portfolio companies) is standing at a podium in front of a room full of LPs who collectively control hundreds of billions in capital. He tells them the valuation declines hitting certain software companies were warranted. Many public software companies will be disrupted by AI, he says, and AI will make that disruption happen far faster than it otherwise would have.
The room is quiet. This is the guy who has bought more software companies than anyone alive, telling his own investors that the carnage is deserved.
But Bravo also offered the other side. For the right software company, AI represents extraordinary growth potential, but only if the company acts on it. He compared the moment to the dot-com bust, when a partner walked into his office and asked if they would ever do another software deal. That question proved spectacularly wrong. Software became the dominant asset class in technology investing for two decades.
Bravo’s bet is that the same pattern holds now. This is the death of a specific kind of software business: one that sells seats to humans, charges for access rather than outcomes, and assumes that headcount growth is the primary revenue driver. The old model is fucked. The new one is being born.
From the ashes of SaaS, a new type of software is emerging. Software that produces outcomes with minimal or zero human involvement. 2026 will be marked as the birth year of Agentic AI.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.