Marc Andreessen’s 15-Year-Old Software Prediction Unfolds Unexpectedly
In an era defined by technological advancement, venture capitalist Marc Andreessen’s 2011 declaration about software’s dominance resonates profoundly today. His article, titled “Why Software Is Eating the World,” outlined the potential of software companies to reshape the global economy. As we approach February 2026, his vision is manifesting in unexpected ways.
Andreesen’s Original Prediction
Fifteen years ago, Andreessen observed a significant technological shift. He noted that software was edging out traditional industries such as retail, video, music, and telecommunications. Market giants like Amazon, Netflix, and Spotify exemplified this transformation.
The Rise of Artificial Intelligence
However, the real twist of fate in this narrative is the emergence of artificial intelligence (AI). Morgan Stanley’s analysts, including Keith Weiss, recently reported that AI is not only an extension of software but is also beginning to consume the software industry itself.
The ‘SaaSpocalypse’
In February 2026, the market experienced a staggering $1 trillion sell-off, a phenomenon now referred to as the “SaaSpocalypse.” This market correction challenges traditional software business models, as AI capabilities expand exponentially.
Changing Dynamics in Software
- AI is revolutionizing how software interacts with unstructured data, which constitutes more than 80% of organizational information.
- This evolution raises concerns about job automation, potentially reducing workforce numbers significantly.
- Investors worry that as companies adopt AI, their dependency on external software solutions may diminish.
Do-It-Yourself Software and Market Disruption
The rise of “do it yourself” software, fueled by AI innovations, threatens established software companies. Traditional firms may face competition from agile startups equipped with advanced coding tools. Investors fear that this democratization may tempt businesses to create their software.
Incumbents and Future Prospects
Despite these challenges, some analysts argue that established software providers can adapt. Companies like Microsoft, Salesforce, and ServiceNow are positioning themselves as leaders in innovation. Morgan Stanley suggests these organizations are evolving into “fast followers,” integrating AI to retain their competitive edge.
The Future of Work and Software
Analysis indicates a shifting landscape where AI enhances productivity but may result in fewer jobs. Experts from Oxford Economics and other institutions warn that the U.S. economy might soon operate effectively without the steady job creation typically required for growth.
As Andreessen acknowledged, while software has catalyzed economic growth, it has also disrupted traditional employment. The implications of this latest phase of technological advancement are profound, suggesting we are on the brink of a “radical abundance” era. However, a transition period lasting over a decade is expected as society adapts to new realities.
