"I believe that the enterprise software industry is at a crossroads," Lane said.

"Its economic structure may be unsustainable," Lane added. Companies can no longer spend 50 to 60 percent of budgets in marketing or 25 percent in research and development if they are a small company, he said.

Despite the negative outlook, there is opportunity, with a demand for IT professionals that outstrips supply and IT budgets rising, Lane said. Venture capital money also is there.

"I'm shocked that we're still seeing $5 billion of VC go into software," Lane said.

To succeed, companies must adopt new models such as software as a service, Lane said. Innovation is also crucial. Software companies also need to find the "white space," meeting a need that is not yet being met. Enterprises still have a lot of manual decision making for automating, he said. Also, individual value must be generated by software, Lane said.