To start 2026, software giants have staggered through some of their sharpest market contractions since 2008. The S&P’s software and services index shed $800 billion in just a few sessions. On February’s harshest days, hundreds of billions evaporated in a matter of hours. It’s clear the industry is facing a reckoning.
According to Satvinder Singh, former CEO of LSEG’s Data & Analytics Division, the “SaaS-pocalypse” isn’t merely a panic – it’s a fundamental reevaluation of software and data in an age of cheap, high-level automation driven by AI. We hosted Satvinder for a roundtable discussion with a group of GLG clients to explore what’s behind the market jolt, what it means for the future of tech and software, and how investors, lenders, and portfolio managers should approach the volatile moment.
Satvinder says the volatility reflects the market grappling with three legitimately concerning risks facing the historically reliable SaaS model: disintermediation, eroding switching costs, and a widening gap between massive capital expenditures on hardware and the lack of clear revenue models to support them.
Investors are no longer asking if a company can scale, but whether its core value proposition can survive as intelligence becomes a commodity. Without clear answers, they need to conceptualize value trends and craft a sound strategy to navigate today’s tumult.
It starts with embracing a new reality, Satvinder says: We’re no longer producing data for humans, we’re producing it for machines. The shift fundamentally changes how you package, price, and protect a software product – and threatens to render the traditional “per-seat” pricing model obsolete.
Given this outlook, Satvinder categorizes the market into three broad buckets: winners, losers, and those that will disappear. The “losers” will be those with generic workflows and data that an open-source agent can replicate. At best, their models will become commodities. Even more vulnerable are those he says will go extinct: pure resellers who offer little more than format arbitrage.
The third group are the winners, who will transform their workflow patterns into “systems of intelligence.” These companies don’t just sell data – they also sell what the data means and what should be done with it. They position themselves as the data backbone and license their “ground truth” into the systems of hyper-scalers rather than trying to out-compete them.
Furthermore, winners will treat trust, provenance, and explainability as premium product features, turning regulatory compliance into a competitive moat. And they will own the AI-native workflow: “If an analyst starts their day by talking to your system, you get enormous leverage,” Satvinder says.
Today’s volatility may mirror the dot-com bubble of 2000 more than a true crash, Satvinder thinks: a sharp separating of weak from sound models; the commoditized resellers from the data-rich, workflow-integrated actors of the future. For investors, the current climate demands an aggressive stress test of every portfolio name, he says. “The future isn’t waiting.”
If you’d like to discuss these trends with Satvinder or other experts in the space, contact your GLG account manager to set up a call or join an event.