AI is shaking software. There's a new way to spot which companies are built to survive.

Six men testing a rubber life raft off Cape Fear, North Carolina. Imago Images/Reuters If AI really is coming for the software industry, which companies have the best chance of making it through?This has been on my mind again this week after the gruesome acquisition of Airtable. This former SaaS startup darling was valued at more than $11 billion during the pandemic tech boom in 2021. It sells a tool for organizing work and related information. On Tuesday, it was acquired for $1.3 billion.Later in the week, HubSpot, a major SaaS vendor, plunged after disappointing guidance. But Atlassian surged after much better results. The SaaS sector has been pummeled this year by investors worrying whether some of these companies will even survive. So, how do you spot survivors in the wreckage?Barclays strategists tried to answer that question by looking backward instead of forward. They studied five major technology shakeups from the past: the rise of digital advertising, streaming, smartphones, online shopping, and shale gas. They looked at what separated the companies that survived from the ones that didn't.The answer wasn't what you might expect.The winners weren't necessarily the fastest-growing companies or the ones that spent the most money. Instead, the survivors tended to share four traits: healthy profit margins, strong cash generation, low debt, and high employee productivity. Those qualities gave management more room to adapt when their industry suddenly changed. It's a useful reminder as the SaaSpocalypse debate gathers pace. Much of the conversation around AI has focused on who has the smartest models or the flashiest product demos. Barclays argues those may not be the defining factors. When an entire industry is under pressure, financial strength and operational discipline may matter more than rapid growth. Companies with healthy profits can absorb shocks. Those carrying less debt have more flexibility to change direction. Efficient businesses simply have more options.Using those characteristics, Barclays created a "Resilient Software" basket. AppLovin, Freshworks, and InterDigital ranked highest across the broader software universe. Looking only at software companies that Barclays already rates positively, Datadog, Veeva Systems, and Zscaler came out on top, followed by Microsoft, Intuit, PTC, Autodesk, Salesforce, Palo Alto Networks, and ServiceNow.No screen can predict who will win the AI era. But this framework offers a refreshing way to think about the software industry. The companies most likely to survive may not be the ones racing fastest. They may simply be the ones with the strongest balance sheets and the most room to maneuver as AI rewrites the rules.Sign up for BI's Tech Memo newsletter here. Reach out to me via email at abarr@businessinsider.com. Read next Alistair Barr is the author of Business Insider's Tech Memo newsletter. Sign up here. Before that, he was BI's Global Tech Editor and the Big Tech team leader at Bloomberg, following a reporting career at The Wall Street Journal, USA Today, Reuters, and MarketWatch. Alistair won a Gerald Loeb Award in 2007 for coverage of short selling and was a finalist in 2013 for scoops on the Facebook IPO. More recently, he won a 2024 San Francisco Press Club award for commentary. Got a tip? Reach out using the secure messaging app Signal (+1 415-341-4927) or via email on abarr@businessinsider.com.ExpertiseAlistair oversees all things Big Tech, along with startups and venture capital. He writes analysis and columns about topics including generative AI, large language models, cloud computing, semiconductors, online search, e-commerce, EVs, robotics, and autonomous vehicles.Popular StoriesArtificial Intelligence:It's getting harder to make big leaps at the frontier of AIOpenAI's AI-adjusted earnings numbers have echoes of Groupon and WeWorkDeath by LLM: Stack Overflow's decline, and its plan to survive, shows the future of free online data in an AI worldCloud computing:Amazon dominated the first cloud era. The AI boom has kicked off Cloud 2.0, and the company doesn't have a head start this time.In cloud, there's AI (which is hot) and everything else (which is not)Chips:Why Intel is still so important: Real countries have fabsApple's made-in-the-USA chips signal a turnaround for the US's big semiconductor betEVs and Tesla:Tesla's AI supercomputer has a Silicon Valley town rushing to meet surging electricity demandTesla's Cybertruck is outselling almost every other EV in the USOnline Search:Google is losing its status as a verbA simple way to fix search: Bright pink ads Software Artificial Intelligence Microsoft More Salesforce