Good morning. Fears that AI could render traditional software vendors obsolete triggered a broad SaaS and cloud sell-off in February, a rout that some investors dubbed “SaaSpocalypse.” The catalyst: Anthropic’s addition of a legal task plug-in to its Claude AI, which wiped roughly $285 billion in tech market value within 24 hours.
The anxiety was straightforward. If AI can perform the tasks once handled by specialized software, or generate bespoke code on demand, why keep paying for software platforms at all? In a Fortune feature, my colleague Jeremy Kahn argues that this framing misses the larger pattern. New technologies rarely eliminate their predecessors outright. More often, they reshape markets, compress margins, and shift where value accrues. Desktop publishing didn’t kill commercial printing, for instance. It democratized it.
For CFOs and finance leaders, this moment isn’t about whether SaaS disappears. It’s about how the economics of software are changing, and what that means for the buy-versus-build calculus. In fact, AI may actually fuel the software industry rather than gut it.
As Kahn notes, by lowering the barriers to writing code, AI could unleash a new wave of companies building specialized business applications, no longer dependent on scarce, expensive coding talent. Finance leaders should expect a shift in value from standalone products to integrated ecosystems.
SaaS profit margins may compress and consolidation may follow, but not because AI cannibalized the industry, Kahn explains. “It will happen because AI fed SaaS,” he writes. You can read Kahn’s deep dive including insights from leading experts here.
I recently spoke with Intuit CFO Sandeep Aujla, who sees the current volatility as part of a familiar cycle. From Y2K to the rise of the internet, each wave of technological change has sparked predictions of disruption while underestimating the durability of established business models, he said.
At the same time, large language model providers are increasingly partnering with incumbent software companies, particularly in regulated environments where accuracy and trust matter. The relationship, Aujla suggested, is less competitive than it appears. “These LLMs are not looking to work against us,” he said. “They’re actually looking to work with us.”
Is AI changing how you think about SaaS or just accelerating trends already underway? I’d like to hear how you’re approaching it. Send me an email.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Adrianne Lee was appointed SVP and CFO of Sally Beauty Holdings, Inc. (NYSE: SBH), effective April 28. Lee succeeds Marlo Cormier, who will be leaving the company, effective April 11 to pursue other opportunities. Lee was most recently serving as president and CFO at Bed Bath & Beyond since 2020 and became chief administrative officer in 2024 and president in 2025. Before that, she held senior executive roles at The Hertz Corporation, including SVP and CFO, North America rental car, and car sales and VP of global financial planning and analysis. Earlier in her career, Lee held finance-focused roles at Best Buy Co., Inc., PepsiAmericas, Inc., Allianz Life and Price Waterhouse Coopers.
R. Brent Jones was appointed CFO of ESAB Corporation (NYSE: ESAB), an industrial compounder, effective in early May. Jones succeeds Kevin Johnson, who is leaving ESAB to pursue a CFO opportunity at a privately held company. Jones brings over three decades of experience to ESAB. Most recently, he served as CFO at Avantor. Previously, Jones was chief financial and operating officer at LifeScan. Earlier in his career, he served as CFO at Klöckner Pentaplast Group. He also held the role of interim CFO at Pall Corporation.
Big Deal
The U.S. Labor Department reported on Friday that employers added 178,000 new jobs last month. And the unemployment rate dipped to 4.3%. The hiring marked a rebound from the loss of 133,000 jobs in February. The job gains were about three times what economists had forecast.
Leisure and hospitality had the strongest month of job growth in two and a half years, with a gain of 44,000 jobs. Construction added 26,000 jobs, perhaps a bounce back related to weather-related distortions in February. Health care and construction were the main drivers of job growth.
“The word resilience gets thrown around a lot, but it’s merited,” according to Appcast Chief Economist Andrew Flowers. “Despite the rollercoaster readings of recent months, and the Iran war triggering deep economic turbulence last month, the underlying labor market trends over the past year have remained intact. Job growth is slowing, yes, but not in freefall, thanks to health care.”
Going deeper
“How to Find Leaders Early Using Neuroscience and AI” is a new report in Wharton’s business journal that discusses new research on how organizations can identify potential leaders based on cognitive and behavioral signals rather than relying on formal experience. Elizabeth “Zab” Johnson and Michael Platt of the Wharton Neuroscience Initiative, Korn Ferry, and Lazul.ai provide research that shows how neuroscience-informed, AI-enabled assessments can add a powerful new layer to leadership pipelines, especially at early career stages.
Overheard
“Warren Buffett’s GEICO spends more than $2 billion a year on advertising. Almost none of it describes a policy. Almost all of it produces comedy.”
—Stuart N. Brotman, digital media laureate and distinguished senior fellow at The Media Institute, writing in a Fortune opinion piece titled “The billion-dollar bet that turned insurance into entertainment.” Brotman served as president and CEO of The Museum of Television & Radio (now The Paley Center for Media).
