Ashley Stewart’s scoop is always worth reading. This week, she published an incisive article about the AI threat to software and how Microsoft, Salesforce, and other companies are responding.
Hidden in this story is a seemingly simple question. “Does your AI agent count as an employee?”
At a recent conference, Microsoft executive Rajesh Jha presented a provocative idea. In the future, as companies deploy large numbers of AI agents, those agents may need their own identities, such as logins, inboxes, and even seats within software systems. If so, AI won’t reduce software revenue. That could expand it.
“Every single one of these physical agents is an opportunity for a seat,” Jha said, envisioning an organization with more agents than humans, effectively making each agent a user who has to pay for a software license, or “seat” in industry parlance.
This is a fundamental twist in the SaaS pricing debate that has rocked companies like Microsoft, Salesforce, and Workday. Investors worry that AI will hollow out the seat-based pricing that is the backbone of enterprise software. Why pay for dozens of licenses when one person can manage dozens of agents?
Jha’s answer: Because those agents are new users. A company with 20 employees might purchase 20 Microsoft 365 licenses today. Even if each employee was assigned 5 AI agents, reducing the number of employees to 10, that could still mean 50 paid seats.
Not everyone will buy it.
Nenad Milicevic, partner at AlixPartners, thinks the opposite. AI agents reduce the number of humans interacting with the software, significantly reducing licenses. Instead of 20 employees, one person may oversee a small number of agents. This change will put pressure on vendors and allow customers to withdraw pricing that no longer makes sense.
Milicevic argues that the winners will be open platforms. Companies may charge extra for machine-based access, but they risk losing customers to software rivals that give agents free reign.
Which brings us back to the core tension. When your AI agent is just an extension of you, charging them extra can feel like double billing. If they are autonomous workers, paying them may be inevitable.
The answer could define the next decade of software economics.
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