Disruption

Orlando Bravo of Thoma Bravo believes AI is significantly impacting software valuations, causing deserved downturns for companies facing disruption. While some software firms are unfairly punished by market volatility, others are poised to thrive in the AI-driven “agentic era.” Bravo also admitted Thoma Bravo overpaid for Medallia, highlighting the challenges of private equity in rapidly evolving tech landscapes.

Private equity’s alliance with AI firms like Anthropic signals a major disruption for enterprise software. Diversified PE firms can leverage AI to cut costs across their portfolios, potentially replacing existing software solutions. This poses a significant threat to software-focused PE firms like Thoma Bravo and Vista Equity Partners, whose business models rely on software acquisitions. While some see AI as an enhancement, the trend suggests AI could eliminate demand for certain software categories, forcing companies to shrink and invest in AI to remain competitive.

Cybersecurity stocks plummeted as AI’s code-scanning capabilities, exemplified by Anthropic’s new tool, raised concerns about industry disruption. Major cybersecurity firms, including CrowdStrike and Zscaler, saw significant stock price drops. While some leaders emphasize AI’s limitations in replacing comprehensive security platforms, analysts suggest AI may primarily impact dedicated code-scanning tools rather than end-to-end solutions. The broader software sector has also faced pressure from AI advancements.

FranklinCovey is hosting a webinar on June 16, 2025, featuring Amy Edmondson, Stephen M. R. Covey, and Liz Wiseman. The discussion will delve into how leaders can thrive amidst constant disruption, addressing the leadership crisis, engagement recession, and adaptability dilemma. The event will explore strategies for navigating uncertainty and fostering successful, resilient organizations.