Lane at first presented a dire picture of the industry, noting that growth has slowed and the profit pool has shrunk. Currently, 85 percent of revenues are concentrated among 15 companies, with three companies making most of the profit. And one company, Microsoft, generates most of that profit, Lane said. Lane is a general partner at Kleiner Perkins Caufield & Byers and was both president and COO at Oracle.

Customers, meanwhile, are dissatisfied with software companies that do not understand their business and want to sell them more of the past, Lane said. For example, customers are wondering why they must for pay maintenance fees to fix bugs in the software companies' software.

"The customers just aren't happy with this industry and are unhappy with what they're seeing in products and unhappy with what they're seeing in services and the industry's understanding of their business," Lane said.

Also, countries such as India and China are producing far more computer science engineers than the United States, Lane said. The United States is no longer dominant.

"We've got to put more people in the industry or get more engineers from India and China to be here," Lane said. Additionally, investments are being made in those countries, he said.