By Lawrence Whittle, Chief Strategy Officer, HTEC
We are all hearing that “Enterprise Software including SaaS” is dead as a category. The real situation is a little more complex, and it is worth doing a history lesson based on my own experience and desk research.
1992
Before the 1990’s, Enterprise Software hardly existed as a category. The landscape was dominated by heavily custom build mainframe type applications that were hard to build and support, and difficult to use.
By around 1995, client–server technology ushered in a new generation of Enterprise Software built for broader adoption, with SAP R/3 as a notable example. Fueled by the promise of significant value and supported by the global systems integration community, a tidal wave of deployments followed.
However, these projects often stretched across multiple years and typically required 5–10x the initial investment in implementation and customization efforts. There was certainly value, but the cost and time to realize it were far greater than expected.
1999
The year Salesforce was born and the enterprise SaaS revolution started. “Software is dead!” was the claim, and over the next 20 years, SaaS and the traditional on-premise enterprise vendors battled intensely, while stock market valuations across the Enterprise Software category soared.
Yes, SaaS made adoption easier. Yet again, many “standard” software solutions ended up costing far more than expected, and the compromise of standard functionality came at a significant cost to user satisfaction and value.
One thing the SaaS revolution did bring was faster release cycles. On-premise Enterprise Software typically operated on 12-month or longer, costly release cycles, whereas SaaS releases were often quarterly, monthly, or even weekly for non-mission-critical applications.
2024
AI becomes part of the modern software vocabulary, raising questions about its impact on SaaS and Enterprise Software companies.
2025
The preface of “Agentic” was added to AI, and a social media frenzy started to seriously question SaaS and the whole Enterprise Software category.
2026
February marked a big valuation correction in the SaaS and Enterprise Software category. However, looking at the valuations of most SaaS / Enterprise Software companies in the public markets, valuation erosion has been ongoing since 2024.
Yes, we have an existential risk.
Now consider the hundreds of SaaS companies sitting in private equity portfolios around the world. Many were acquired between 2021 and 2023 at inflated valuations. These are rotting assets.
REALITY CHECK
While it may not be time to panic, it is definitely time to take action.
There are some amazing SaaS / Enterprise Software companies out there. SAP, Oracle, Salesforce, and Workday are all iconic companies that are not going away because the underlying workflow and data repositories are valuable and very difficult to replace.
However, AI is a new paradigm, and the issue is not about SaaS / large Enterprise Software companies building AI add-ons or buying AI companies at very high valuations. The shift is way more fundamental.
It really is a DNA issue.
For decades, software companies have gradually built applications through market requirements, product requirements, and software delivery processes—an approach used by SaaS for the past 20 years and by Enterprise Software companies for over 40. While these processes have accelerated over the last two decades, the Software Development Life Cycle (SDLC) is now being transformed by AI.
WHY IS HTEC DIFFERENT
For over a decade, HTEC has been rapidly building enterprise-class software solutions for both SaaS companies and legacy Enterprise Software companies that needed to modernize and innovate. In addition HTEC also delivered the same value for enterprise clients who could not work with standard software or who required software IP as part of their overall business model.
HTEC has been doing AI and ML for 10+ years.
We never entered the messy world of implementing “standard” software or doing what is now commodity system integration work.
At our core, we build teams that can ideate, design, specify, and build rapid software assets. Our mission has been to always deliver high-quality, on-time software at an acceptable price.
This rapid build and rapid deploy SDLC has been part of our DNA for a decade. Our clients own the IP, and thus, our incentives are aligned.
The term Forward Deploy Engineers has emerged in the last couple of years around AI. HTEC has had this FDE focus since its inception.
With ~2500 highly skilled engineers fundamentally oriented to delivering high quality at speed, the opportunity for HTEC to help both SaaS and on‑premise Enterprise Software companies modernize and innovate quickly is clear.
Can these companies do it themselves by hiring new talent or buying AI companies? Perhaps, but when you factor in time and risk, the value and impact of the HTEC approach become more than evident.
2026 and beyond
HTEC and similar companies with this new SDLC approach will prosper while also helping the SaaS and Enterprise Software sector reinvent itself. On the other hand, the traditional services companies and SaaS/Enterprise companies that try to do it alone might find themself struggling, because this is not a skill or will issue.
It is a software engineering DNA issue.
