Enterprise Software Spending to Reach $1.2 Trillion This Year

Enterprise software spending is expected to reach $1.2 trillion this year, an 11% increase from last year. Despite the advancements in artificial intelligence, it is unlikely to "kill" the industry.

Enterprise software spending is projected to reach $1.2 trillion this year, marking an 11% increase from last year, according to industry reports [1]. Despite the significant advancements in artificial intelligence (AI), the software industry remains resilient and is unlikely to be "killed" by AI technologies. Instead, AI is transforming the industry, creating new opportunities and challenges.

The rise of AI is reshaping the enterprise software landscape. Companies like Salesforce (CRM) and Adobe (ADBE) have seen their shares decline this year, with Salesforce being the second-worst performing stock in the Dow [1]. However, this downturn can be attributed to the rapid evolution of AI tools that can write and develop code, challenging traditional software models. Analysts predict that AI could disrupt the Software as a Service (SaaS) model, which has been a cornerstone of the software industry [1].

Private equity firms are also adapting to this shift. Thoma Bravo, a prominent private equity firm, has merged Verint Systems with Calabrio to build an AI-driven customer experience platform targeting the $50 billion market [2]. This strategic move exemplifies the industry's focus on operational synergy and technological integration, leveraging AI and cloud-native technologies to create scalable ecosystems.

While AI presents both opportunities and threats, the software industry is unlikely to be decimated by it. Analysts suggest that AI is more likely to transform the industry than to replace it entirely. For instance, Salesforce has its own AI agent tool called "agentforce," indicating that established companies are also investing in AI to stay competitive [1].

The market's uncertainty about AI's impact is evident in the recent downturn of software shares. However, experts believe that software companies will eventually adapt and find ways to monetize AI technologies. Brent Thill, an equity analyst at Jefferies, believes that fears about AI replacing software are overblown and that software companies will ultimately rebound [1].

In conclusion, while AI is transforming the enterprise software industry, it is unlikely to "kill" it. Instead, AI is creating new opportunities for growth and innovation. As the industry adapts to this new landscape, investors can expect continued volatility and uncertainty in the short term, but the long-term prospects for enterprise software remain promising.

References:
[1] https://www.cnn.com/2025/08/25/markets/software-shares-ai-stock
[2] https://www.ainvest.com/news/private-equity-strategic-shift-building-ai-driven-enterprise-software-platforms-post-ir-3-0-era-2508/