Software Is AI, If You Do It Right: Spaht

Speakers

Holden Spaht — Managing Partner, Thoma Bravo

Summary

The recent "fear of software" sell-off is driven by a false narrative that AI will replace all SaaS; in reality, AI is an accelerant for companies with deep domain expertise.
"Vibe coding" (AI-generated code) poses zero threat to mission-critical, high-liability systems of record (e.g., payroll, aviation safety, supply chain) where error tolerance is zero.
Thoma Bravo portfolio companies are seeing bookings growth (22%) outpace revenue growth, indicating AI features are driving sales, not cannibalizing seats.
Disruption risk is real but isolated to "commodity" software tasks: lead sorting, basic marketing automation, and simple document management.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
DAY /WDAY /ADP	LONG	Holden Spaht Managing Partner, Thoma Bravo	"Nobody is vibe coding Dayforce... It needs to be audited. It needs to be checked. It needs to be correct... high cost of error." The market is indiscriminately selling software stocks on the fear that AI agents will replace SaaS seats. Spaht argues that highly regulated, complex "systems of record" (like Payroll/HR) have a moat built on compliance and data ontology that LLMs cannot replicate. Therefore, the sell-off in these specific names represents a value disconnect. LONG "High-Consequence" Vertical SaaS. AI agents eventually becoming capable of handling complex, multi-jurisdictional compliance tasks without hallucination.	2:44
HUBS /DOCU /ZI	AVOID	Holden Spaht Managing Partner, Thoma Bravo	"If you're going to say, what could they disrupt? ... maybe I'm sorting leads... or it's a front end marketing automation tool, or it's choosing words out of a document." Spaht explicitly identifies "low-stakes" administrative tasks as vulnerable. Companies whose primary value proposition is organizing sales leads (ZoomInfo), basic marketing automation (HubSpot), or document text management (DocuSign) face existential risk from foundational models that can do this natively for free. AVOID / SHORT Commodity SaaS. These companies successfully pivot to becoming "systems of record" rather than just workflow tools.	—
AMZN /GOOGL /MSFT	LONG	Holden Spaht Managing Partner, Thoma Bravo	"We view them [Anthropic/OpenAI]... as a great route to market for them because they don't understand these domains... We started with Claude's MCP embedded into all of our software tools." The relationship between Big Tech AI (Hyperscalers/Model Builders) and Vertical SaaS is symbiotic, not adversarial. The Model Builders (Amazon/Anthropic, Microsoft/OpenAI, Google) provide the engine, while the SaaS companies provide the distribution and domain context. This confirms the "AI Infrastructure" long thesis remains intact as the enterprise layer adopts their models. LONG AI Model Providers. Regulatory crackdowns on AI model dominance or commoditization of the model layer itself.	—