What the anecdote below actually shows is not that software is dead. It shows that a certain kind of software, and more specifically a certain kind of software pricing, is under real pressure. That is a big deal. But it is a different claim.
There is a tendency right now to treat any successful internal rebuild as proof that the whole software category has collapsed. That is too simplistic.
Three Things That Are Actually Happening
First, the vendor was simply overpriced. Enterprise software has long contained pockets of extraordinary margin. AI does not create that weakness. It exposes it.
Second, the company may have only needed a thin slice of the product. If an internal team can rebuild the 20 percent that matters, the replacement can feel complete even if it is not.
Third, the visible product was never the whole thing. The real work lives underneath. Reliability. Permissions. Auditability. Integrations. Edge cases. Governance. Support. Continuity when the person who built it leaves.
Code Plus Continuity
People confuse the collapsing cost of building software-shaped things with the collapsing need for software companies. Those are not the same.
The question for a serious company is rarely just can we build it. The question is whether the thing can be trusted, maintained, secured, extended, and operated over time. Software is not just code. Software in a business setting is code plus continuity.
The Commercial Refactor
For years, large parts of the industry were rewarded for packaging software into seat-based, feature-heavy products with healthy margins. Buyers paid because building in-house was slow, expensive, and uncertain. AI changes that equation. If a competent operator can now spin up bespoke internal tools in weeks instead of quarters, then a whole stratum of enterprise software becomes vulnerable.
The Vulnerable Middle
The danger is greatest for software that sits in an uncomfortable middle ground. Not mission critical enough to be untouchable. Not technically deep enough to be hard to replicate. Not trusted enough to be irreplaceable. Those businesses should be worried now.
Where Value Moves
When a capability becomes abundant, value moves to the new bottlenecks. Trusted execution, workflow ownership, integration, compliance, audit trails, and measurable outcomes.
The winning software companies will charge less for the interface and more for the operational layer. Some will move from seat pricing to outcomes. Some will become orchestration layers rather than standalone destinations.
The Real Refactor
The software industry has lived through business model shifts before. Perpetual licenses gave way to subscriptions. On-premise gave way to cloud. In each case, the products did not vanish. The commercial logic changed. Value migrated. Winners adapted.
The AI era looks similar, but faster and more brutal. The new premium will go to those who can own outcomes, embed deeply in workflows, and reduce organisational risk.
So yes, bloated SaaS with shallow moats is in trouble. But no, software is not toast.
It is not software itself that is breaking. It is the old agreement about what software is worth, how it should be sold, and where the moat really lives.
The tweet got one thing right. Something important is breaking.