'Software Isn't Dead, But Its Cosy Business Model Might Be'

The software industry's decades-old habit of charging companies a flat fee for every employee who uses a product is running into a fundamental problem: AI agents don't sit in chairs, and they don't need licences. As autonomous agents take on tasks that human workers once handled, the per-seat pricing model that made SaaS revenue so predictable is giving way to consumption-based and hybrid alternatives. Snowflake and Databricks (valued at $134 billion) already charge based on usage. Salesforce initially priced its Agentforce customer relations bot at $2 per conversation but faced customer pushback and now offers action-based pricing, upfront credits and fixed fees. ServiceNow's finance chief Amit Zavery said last month that some customers aren't ready for purely consumption-based models. Goldman Sachs estimates US software spending will nearly triple to $2.8 trillion by 2037 as automated tasks blur the boundary between IT and wage budgets, but that money will no longer arrive in the neat recurring instalments that investors and private equity firms have come to expect.

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