Why Will Enterprise Software Vendors Consolidate?

Nikesh Arora says there is going to be a huge disruption in the SaaS space over the next few years. Arvind Krishna builds on that point. Krishna says the average enterprise uses anywhere from 500 to 5,000 distinct software vendors, and that stack is a massive attack surface, not only a cyber problem.

Krishna asks whether 490 of those vendors could be replaced with minor AI capabilities, leaving 5 to 10 main platforms. The consolidation is where the spend goes. If distribution cost has to stay low and the value of each product is falling, a company cannot afford independent distribution for every vendor. Krishna says the change plays out somewhere between six months and six years.