Is it too late to comment on the impending demise of software? Probably, but I’ll do it anyway. After all, it’s been a week. Maybe the freakout is over. So what exactly happened?
Pretty simple. Anthropic threw down. That’s it. What do I mean? They released some plugins. Seriously. Plugins! And $300B went poof! Why? Let the freakout begin.
Suddenly, ok, kind of inexplicably, this shifted the thinking from "AI helps software companies" to "AI replaces them." Or to put it more bluntly, “Software is dead.” Really?
Nope. I mean we’ve seen this movie before right? Streaming? Supposed to kill Hollywood. Amazon? Would kill retail. MOOCs? There go the universities. And the most ironic? Open source? The death of software was imminent! After all, if software is free, how does anyone make money selling it?
These were all hyperbolic. Hollywood's still here. Retail's still here. Universities are still here. And last I checked, people are still making a LOT of money selling software.
So, if not the death of software, what then? Will software be affected? You bet. But “affected” and “dead” are very different, very different indeed.
In fact, there will be more software, not less.
What intelligence does is reveal the latent demand in enterprise workflows. How many times a day, a week, a month are you stuck in that same cognitive loop, sending the same emails, generating the same bits, handling the same process? But rigid, deterministic software doesn’t handle these challenges. Because they all need a little piece of you, of your brain, of your “intelligence.”
The explosion of AI-generated code means we'll produce more software faster, which grows the total market rather than shrinking it. As I’ve heard Steven Sinofsky say, “AI just moves software up the stack.” AI makes the software layer within existing industries more capable. The stack gets taller, not shorter.
The other thing to think about is improvisation. Software without intelligence is workflow, deterministic workflow. Software with intelligence is improvised workflow. Decisions made around fuzzy situations, previously requiring humans. All those fuzzy tasks your people are improvising through right now? They're tomorrow's software.
Will some software die? Yup. Lotus 1-2-3 died. Not spreadsheets. Netscape Navigator died. Not browsers. Blackberry died. Not smartphones. What happened when we moved to the cloud? Enterprise IT spending grew from roughly $3.5T in 2012 to over $5T today!
Will some SaaS companies make less money? Sure. Will some pricing models suffer? You betcha. But that's not the death of software. That's the end of dumb software. And the beginning of intelligent software.
Software’s not going away. It’s not dying. It’s blossoming, growing, expanding. Agentic workflow with intelligence embedded will be unleashed in the enterprise. By SaaS companies. And by IT departments. And by you!
Related: The Agentic Shift: What Five Years of AI Progress Really Delivered