The death of software has been greatly exaggerated, said Orlando Bravo, who has more riding on its comeback than perhaps anybody in the world.
The firm he runs, Thoma Bravo, oversees $170 billion in investments, nearly all of it invested in corporate software under threat from cheaper replacements spun up by AI coding bots.
“Right now it’s a really, really hard time to buy and sell a company,” Bravo said on an episode of Semafor’s Compound Interest. “There have been four times the software industry has been doubted, and this is one of them. Every other time, it’s boomed after it’s been doubted. People got it wrong. It’ll be the same thing this time.”
The sharp decline earlier this year in software stocks ground dealmaking in the sector to a halt, as CEOs were reluctant to sell at the bottom and private-equity firms struggled to raise the debt. That freeze is starting to thaw, with deals like Schneider’s $23 billion acquisition of PTC and the $6 billion takeover last week of AI cybersecurity company Varonis by a Thoma-backed competitor.
The only questions that matter, he said, are “what is your level of domain expertise and how difficult it is to replicate it.”
Dayforce, an HR-software provider Thoma Bravo bought in 2025, “is not selling you code.
[It] is selling the following: ‘I will pay your employees on time, their deductions will be right, and their amount on their paycheck will be right. And if they’re not, I take the liability for it.’”
“Yeah, somebody could try to recreate their code,” Bravo said. “Great. The business is not about that.”
He also said the coming IPOs of “monster companies” like Anthropic and OpenAI will crowd others out of the capital markets — bad news for the private equity industry, which is sitting on an estimated $3.8 trillion backlog of unsold companies.
“Who’s gonna pay attention with this stuff when they have to make big decisions on this enormous capital?” he said.