# The End of Growth in Software: Below 5% How AI and seat-based models are transforming the software industry? - **Source:** [SaaStr](https://www.saastr.com) - **Published:** 2026-07-20 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/b8840924-d6ac-48ff-9d94-8e4acfc4339d ## The End of Slow Growth For the past two decades, slow growth was acceptable for B2B software companies. However, the rise of AI and the collapse of seat-based models have changed this. Companies growing below 5% are now evaluated differently by the market. ## The Case of Dropbox and PagerDuty Dropbox grew only 0.8% last quarter and predicts a revenue decline for the next year. PagerDuty is almost stagnant with 1% growth. Both companies are experiencing the collapse of seat-based models due to AI's impact. ## Zoom's Situation Zoom showed 5.5% growth last quarter, but enterprise customer spending is decreasing. Net dollar expansion rate fell to 99%, indicating existing customers are spending less. ## DocuSign's Trend DocuSign appears healthier with 8.7% growth, but its five-year average has dropped from 15% to single digits. The trend has become more important than the current level. ## AI's Impact AI directly affects seat-based models. One AI agent can do the work of ten support representatives. This leads customers to purchase fewer seats and halts companies' growth. ## The Rise of Infrastructure Companies Companies investing in AI infrastructure are growing rapidly. Cloudflare grew 28-29%, Snowflake 30%, and Twilio 20%. As AI usage increases, these companies' revenues also rise. ## The Future of the Software Industry There is no longer a single software category. A distinction exists between infrastructure companies fueled by AI and application companies consumed by AI. This change is shaping the industry's future. ## Sources covering this story - https://www.saastr.com/the-sub-5-club-the-terminal-state-of-software/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._