Insight Partners secured a massive $12.5 billion fund focused on B2B software, signaling institutional investors' confidence in the sector. This wasn't just another venture fund - it represented a bet that the next wave of software innovation would come from unexpected places.

The incumbents

The signs were everywhere. GitHub's Copilot reached 1.8 million users across 77,000 organizations. Cloudflare deployed GPUs across 170+ locations globally. Figma developed AI features through extensive prototyping rather than rushing to market. These weren't experiments - they represented fundamental shifts in how software delivers value.

HubSpot's co-founder Brian Halligan explained why established players may have the upper hand: deep data repositories, existing customer relationships, and robust infrastructure give them natural advantages in implementing AI. This potentially marks a departure from previous tech waves where startups typically led innovation.

The playbook

GitHub abandoned traditional roadmaps in favor of learning objectives. Cloudflare adopted a three-horizon approach spanning immediate needs to long-term research. Figma turned to hackathons for product direction.

Gartner projects $300 billion in SaaS expenditure this year, growing at 20%. But more telling than the numbers is how companies are growing. Ramp focuses on making processes "disappear" for their 25,000 customers. Figma emphasizes augmenting rather than replacing designers. The goal isn't just better software - it's fundamentally different software.

The market responds

Investors and industry leaders are taking notice. A recent survey found 78% of SaaS professionals are optimistic about growth in 2025. Major SaaS stocks posted significant gains. Even pricing models are evolving, with companies like Salesforce and Zendesk experimenting with outcome-based pricing for AI-powered services.

The other side

Despite their current advantages, established software companies face three potential disruption risks:

First, their pricing power could erode. While incumbents experiment with outcome-based pricing for AI features, a startup could radically simplify pricing - imagine Stripe's elegant simplicity applied to enterprise software. Fixed contracts and complex pricing tiers might suddenly feel outdated.

Second, their carefully planned AI integration strategies could backfire. GitHub's methodical approach and Cloudflare's infrastructure investments make sense now, but what if a nimble competitor builds something radically simpler on top of open source models? Technical debt could become an anchor rather than an asset.

Third, their customer relationships could become a liability. Today's enterprise relationships are built on customization and hand-holding. If AI makes software truly self-serve, these relationships might transform from moat to overhead. A new player offering zero-touch deployment could render expensive sales teams obsolete.

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