In short: The SaaSpocalypse's first body, per Luria: PE-owned software companies "that's gutted them, that are not renewing their products… because the private equity assumed that the stream goes on forever. Those companies are going to be gone." And: "it's already happened. It happened in Medallia last week… this is why there's distress around private equity."
Medallia is customer-experience software, taken private by a buyout firm. It matters here as the first actual failure of the pattern Luria says will produce most of the software carnage — and the reason he insists the SaaSpocalypse is mostly a private event.
The private-equity model for software is to buy the company, stop spending on the product, and collect the subscription revenue ("I buy the software company, milk it — the revenue will continue"). That works while customers renew out of habit. It stops working when budgets get squeezed by AI spending and the CIO goes looking for things to cancel — and small, unimproved products are cut first. "It's already happened. It happened in Medallia last week… this is why there's distress around private equity."
The corollary is a credit point worth keeping: the listed software companies "are in a net cash position. They don't borrow money… software debt is private equity." The loans at risk are not on the public companies' balance sheets.
40:46This is less like gone and they're already it's already happened. It happened in Medalia last week and this is why there's distress around private equity because that assumption that this cash flow will continue. Why are those companies more at risk than the some of the public companies? Two reasons.
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