Share prices are tumbling for some of the biggest names in business software. In recent weeks, Salesforce, ServiceNow, and Oracle have all seen their stock values decline, sparking questions about the future of the industry.
Even if you don’t recognize those names, chances are your employer relies on their software daily. These systems are the backbone of many businesses, managing crucial data about customers, employees, and finances – everything from payroll to customer service.
Now, a new wave of “agentic” artificial intelligence (AI) tools – including Anthropic’s Cowork, OpenAI’s Frontier, and open-source platforms like OpenClaw – are poised to reduce the need for traditional software in everyday work. But how secure are these jobs, and how quickly could AI truly disrupt this massive market?
The Digital Plumbing of the Business World
Software-as-a-service (SaaS) systems operate in the cloud, minimizing the need for expensive in-house hardware and IT personnel. This cloud-based approach also allows businesses to scale more easily as they grow.
SaaS vendors generate consistent revenue through a subscription model, with firms essentially “renting” the software, typically paying a fee per user – often called a “seat.”
Austin Distel/Unsplash
Switching providers can be costly and risky, as these systems become deeply embedded in a firm’s operations, according to research published in 2016. Some companies find themselves locked into these systems for a decade or more.
Digital Co-Workers
Agentic AI systems function like digital assistants or “bots.” While software bots aren’t new – robotic process automation is already widely used for routine tasks – recent advancements combine this automation with generative AI to tackle more complex goals.
These agents can select tools, make decisions, and complete multi-step tasks, potentially automating everything from expense reports to social media management and customer correspondence.
What AI Can Now Do
The latest developments are even more ambitious. Reports indicate that AI tools are now capable of writing usable software code, with soaring productivity in software development attributed to agents like Anthropic’s “Claude Code.” Anthropic’s Cowork tool extends these capabilities beyond coding to other knowledge work tasks.
In theory, a user can describe a business problem in plain language, and the agentic AI will deliver a working code solution integrated with existing systems. If reliable, these agents could function as junior software engineers and process designers, expanding to handle other entry-level work.
These advances recently spooked the market, causing a dip in stock prices (though many have since partially recovered). Whether this is a temporary overreaction or a sign of a long-term shift remains to be seen.
Don Feria/AP Content Services for Anthropic
How Will It Affect Jobs and Costs?
Since the arrival of OpenAI’s ChatGPT in November 2022, AI tools have sparked debate about the future of work. Some predict that many white-collar roles, including those of software engineers and lawyers, will be transformed or even replaced.
Agentic AI appears to accelerate this trend, promising to empower knowledge workers to build workflows and tools without coding expertise.
Software-as-a-service providers will also face pressure to adjust their pricing models. The traditional per-user model may become less relevant as AI agents handle more of the work, potentially shifting towards usage-based or value-based pricing.
Hype, Reality, and Limits
Several factors are likely to moderate the pace of change. First, the full potential of AI has yet to be realized. In some cases, using AI can even worsen performance. The biggest gains are likely to be in routine tasks that can be readily automated, rather than those requiring complex judgment.
The nearly 20% decline in junior software engineering jobs over three years highlights the impact of AI automation. As AI agents improve at higher-level reasoning, more senior roles could also be affected.
Second, benefiting from AI requires firms to redesign jobs, processes, and control systems. Organizational change is often slower and more complex than technological change.
Third, we must consider the risks and potential regulations. Over-reliance on AI can erode human knowledge and skills. Short-term efficiency gains could be offset by a long-term loss of expertise and creativity. Ironically, this loss of expertise could make it harder to ensure AI systems comply with policies and regulations.
Technology Is Evolving Quickly
Significant change is already underway. Technology is evolving rapidly, work practices are adjusting, and laws and social norms will change more slowly.
Software companies won’t disappear overnight, and neither will the jobs of those who use their software. But agentic AI will reshape what they sell, how they charge, and how visible they are to end users.
