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

The advent of advanced AI agents, dubbed 'Digital Coworkers' like Anthropic's Cowork and OpenAI's Frontier, presents a significant threat to established business software companies such as Salesforce, ServiceNow, and Oracle. These AI tools are capable of performing multi-step tasks, making decisions, and utilizing existing software, thereby diminishing the reliance on human users for many functions. This technological evolution directly impacts the software industry's prevailing 'per-user' pricing model, as companies may no longer require as many software licenses if AI agents perform the work. The implications extend to the workforce, with a noticeable decline in junior software engineering jobs signaling a trend towards AI-driven automation of routine and even some complex tasks. While AI promises increased workplace efficiency, it also necessitates that human workers adapt by acquiring new skills to remain relevant. The article highlights that companies might eventually opt to build their own software using AI coding tools, further disrupting traditional vendors. However, the complete AI takeover is not without limitations. Challenges include AI's current struggle with complex judgment calls, the slow pace of organizational change required to integrate AI effectively, the risk of human skill erosion due to over-reliance on AI, and the ongoing development of regulatory frameworks. Despite these brakes, the future of work will likely involve hybrid teams where humans manage AI counterparts, and SaaS tools will evolve into more integrated, less visible infrastructure, leading to new pricing models and increased competition.