AI threatens to eat business software – and it could change the way we work

Software-as-a-Service Decline: Shares of SaaS companies such as Salesforce, ServiceNow, and Oracle have recently dropped due to the emergence of new AI tools.
Dependency on SaaS: These software tools manage crucial business operations like payroll, purchasing, and customer service, making switching costly and challenging.
Rise of Agentic AI: New AI tools such as Anthropic’s Cowork, and others, are anticipated to decrease reliance on traditional SaaS.
AI’s Capability: These tools can now write software code and perform complex tasks, potentially replacing traditional software engineering roles.
Job Market Impact: The advent and advancement of AI tools raise concerns about job security, especially in white-collar roles like software engineering and law.
Shift in Business Models: SaaS providers might need to adapt pricing models, shifting from per-user charges to usage-based billing.
Limits to AI Adoption: The transition to AI usage is constrained by incomplete AI potential realization, required organizational changes, and regulatory risks.
Technological Evolution: Despite changes, significant transformations in SaaS and the impact of agentic AI are underway, though evolving legal frameworks and social norms may lag behind.