In 2011, venture capitalist Marc Andreessen declared that “software is eating the world.” Today, AI is starting to devour software.
New AI tools and agents may completely replace some software products rather than contributing to the improvement of the industry.
This fear has materialized in three developments in recent weeks. Anthropic’s release of a new autonomous AI agent called Cowork, the launch of industry-specific Cowork plugins, and the rise of OpenClaw, an open-source AI assistant that has quickly become popular through messaging apps.
“Is this the end of software?” wrote Raimo Lenshaw, a veteran technology analyst at Barclays, in a recent note to investors. “The current situation in the software industry feels very unique, with a significant expansion of how AI will impact the sector in the long term.”
Dual AI threat
Today, businesses get things done through a complex collection of different software services that help them organize data, track finances, sell products, and manage employees, customers, supply chains, and contracts. (If you’ve ever had to log into Workday, you know what I mean).
Generative AI poses a threat to these applications in two main ways. First, if employees use AI tools to become more efficient, companies may not need to purchase as many business software subscriptions. That would hinder growth in the number of “seats,” or subscriptions sold by software companies. Each employee has a seat, so without new hires, growth will stagnate.
The second threat is more existential. If AI tools and agents become good enough, companies could completely replace the software they use and instead rely on new AI-powered workflows. Companies can also develop their own software without purchasing software from existing vendors, as AI coding tools have shown significant improvements recently.
artificial shock
This is why Anthropic’s recent announcement was a huge blow to the software space.
Anthropic’s Cowork represents a clear step beyond chatbots. Cowork goes beyond simply answering questions and can plan and execute multi-step tasks on your computer. Users can give AI access to folders, files, and applications, allowing it to clean documents, create spreadsheets and slide decks, analyze data, automate workflows, and even log into web apps to gather information.
Barclays analysts say Cowork is close to what Microsoft originally envisioned as Copilot, a true digital worker, but with far greater autonomy. Microsoft stock has fallen about 12% over the past week.
Cowork is designed for non-technical and semi-technical users who can provide instructions using plain English, such as marketers, project managers, and financial professionals. This is important because it weakens the traditional value proposition of many SaaS tools. The need for dedicated single-purpose applications becomes less obvious as AI agents can organize files, generate reports, build dashboards, and automate routine workflows on demand.
The threat became more specific when Anthropic followed up this week with the release of a plugin for Cowork. These plugins effectively turn AI into specialists in roles such as sales, finance, legal, marketing, and customer support, connecting directly to internal data sources and tools. Anthropic has open sourced a starter set of plugins, demonstrating its approach to an ecosystem rather than a closed product.
“This is another striking example of AI tools lowering barriers to entry, gaining traction and disrupting existing workflows,” said Michelle Miller, co-head of the enterprise software technology group at consulting firm AlixPartners.
Why this hurts SaaS business models
For years, companies purchased software because it was too time consuming and expensive to build it themselves. Generative AI flips that equation. Tools like Anthropic’s Claude, OpenAI-powered coding assistant, StackBlitz, Replit, and other products allow non-engineers to create custom tools with relatively simple English prompts.
Netlify CEO Matt Biilmann said his company’s employees are using AI to build in-house products that replace SaaS products, such as surveys and quoting tools. Venture capitalist Martin Casado says this was because building a personal CRM using AI was easier than learning a complex off-the-shelf product. Salesforce, a leading CRM software vendor, is down 42% over the past year.
This shift is especially dangerous for midsize SaaS companies. AlixPartners says it’s caught between nimble AI-native startups on the one hand and tech giants bundling AI into their existing platforms on the other. Business buyers under pressure to reduce costs are increasingly asking why they need five tools when one AI tool or agent can do some or most of the work.
Pricing adds even more tension. AI systems are expensive to operate, making traditional per-seat pricing difficult to justify. Companies like ServiceNow are experimenting with hybrid and usage-based models. CEO Bill McDermott insists that AI is not hurting the company’s results, but investors remain skeptical. ServiceNow stock has plummeted 25% over the past month.
open claw moment
If Cowork represents top-down push from well-funded AI labs, OpenClaw (previously known as Moltbot) shows how disruption can also come from the bottom up.
Created as a personal project and released as open source, OpenClaw is a messaging-first AI assistant that works within platforms like WhatsApp, Slack, and iMessage. Heavily relying on Anthropic’s Claude model, OpenClaw can remember context, proactively interact with users, and automate tasks using browser actions, scripts, and scheduled jobs. After a month of relative obscurity, it went viral in late January.
What caught investors’ attention was not just OpenClaw’s popularity, but what OpenClaw stands for. Instead of logging into multiple apps, users interact with an AI agent in a chat window and let it coordinate tasks behind the scenes. In fact, the interface becomes a conversation rather than a software menu.
Barclays analysts noted that OpenClaw’s underlying “gateway,” which routes tasks between agents and tools, is similar to the orchestration layer that many enterprise software vendors are currently competing to build.
The difference is that OpenClaw is free, open source, and user controlled. This is an alarming combination for established software companies that rely on expensive licenses. This is also a potential problem since the direct relationship with users is now controlled by OpenClaw rather than the software provider.
eat or be eaten
None of this means that software will disappear overnight. Core systems of record, such as databases, payroll systems, and accounting ledgers, remain deeply embedded in business operations. But the layers around them are becoming fluid. Dashboards, workflows, reports, and even entire applications can now be instantly generated and consumed by AI agents.
For SaaS companies, the message is tough. Adapt with agents, flexible pricing, and AI-native design, or risk becoming the next thing AI consumes.
“AI is forcing changes in software development, AI governance and data security, go-to-market operations, pricing models, valuation frameworks, and entire business structures,” said AlixPartners’ Miller. “Software companies that master these transitions will determine the winners of the next era, while those that cannot adapt will be sidelined as the foundations of their industry are rewritten.”
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