AI is reshaping software into dynamic, on‐demand services
For decades, software has functioned as a collection of rigid, separate applications. Need to check the weather? Open an app. Book a flight? Another app. Manage finances? Yet another. It’s an inefficient system, clunky and slow.
AI is changing this completely. Instead of moving between isolated programs, users will interact with a single intelligent agent that manages multiple tasks seamlessly. Travel planning, financial optimization, and even legal document processing will happen through one interface—without switching between apps. Software won’t be something you open; it’ll be something that works continuously in the background, responding instantly to what you need.
The transition from app-based computing to AI-driven services is already happening. Large models are becoming sophisticated enough to generate real-time responses instead of simply retrieving prepackaged outputs. This means AI won’t be constrained by app limitations. Instead, it will dynamically pull in information, process requests, and execute tasks—all through conversational, predictive interactions.
For businesses, this shift represents a massive opportunity. Companies that integrate AI-native systems into their workflows will gain efficiency and agility, while those stuck in legacy software paradigms risk falling behind. The future belongs to those who move fast, embrace change, and reimagine how software works—not as a set of isolated tools but as an integrated, intelligent system that operates without friction.
AI Is disrupting digital marketplaces and traditional software distribution
For years, digital marketplaces controlled software distribution by acting as the gatekeepers between developers and users. Platforms charged high commissions on transactions, controlled distribution, and dictated which applications could be accessed. This model worked because applications were essential. AI is making them unnecessary.
AI-driven service layers are replacing the need to download and open standalone applications. Users will no longer have to purchase or install multiple tools when a single AI system can handle tasks dynamically. When AI manages transactions, services, and interactions without the need for app store distribution, the traditional revenue model collapses. No more 30% platform fees on app sales or in-app purchases. No more dependence on walled-garden ecosystems.
AI services are cloud-native and operate independently of specific hardware or operating systems. Digital platforms that once dictated access and monetization strategies will lose their grip as AI-driven solutions bypass these central controls. The new competitive advantage will belong to those who build and own AI-powered service ecosystems, not those who simply host applications.
For executives, this means rethinking distribution strategies now. Companies that once relied on app-based revenue must transition toward AI-integrated services or risk becoming obsolete. The ones who control AI-driven interactions will define the next generation of digital commerce.
The next market leaders will control AI models, interfaces, and data pipelines
As software becomes less about standalone applications and more about integrated, AI-driven services, the sources of value and control are shifting. The companies that dominate the next wave of technology will not be those selling traditional software but those that control the intelligence, accessibility, and data that power AI systems.
There are three core areas where dominance will matter most. First, the AI models themselves. The organizations developing the most advanced foundation models will define the intelligence layer that powers everything else. Second, the user interface. AI that is not intuitive or seamless will fail to gain adoption. The companies that design the most natural, efficient, and integrated AI experiences will win engagement. Lastly, data pipelines. AI is only as good as the data it has access to. The ability to integrate proprietary, real-time data streams will create long-term competitive advantages and economic control.
Owning any one of these areas provides leverage, but controlling all three—intelligence, interface, and data—is what will shape trillion-dollar industries. AI is not just altering how software works; it’s shifting who has power in the tech economy. Companies that invest in AI infrastructure now will position themselves at the top, while those that hesitate will struggle to remain relevant.
Vertical AI solutions will drive adoption
General-purpose AI models are powerful, but they are not always practical. A broad AI system that can do everything often lacks the precision businesses need for specialized tasks. Users do not want to spend time figuring out how to make AI work for them; they want solutions that immediately fit their industry, workflow, and objectives.
This is where vertical AI becomes critical. Instead of a single AI handling a wide range of vague requests, vertical AI solutions are built for specific industries. Legal AI will draft contracts with the right formatting and terminology. Financial AI will analyze investments based on real-time market conditions. Scientific AI will accelerate research by processing complex datasets instantly. These are not general features—they are targeted capabilities that provide real, immediate value.
For businesses, this means AI adoption is not about using the most advanced model—it is about using the right model. The shift toward AI-driven automation will be led by companies that integrate purpose-built AI systems directly into their workflows. The companies that succeed will not just develop AI; they will create AI that understands the nuances of their industry and executes flawlessly.
AI-first architectures are rewriting the software model
The traditional software model was built around large, standalone applications that users had to install, update, and navigate manually. That approach is being replaced by AI-driven, modular systems that operate in real time. Instead of relying on bloated applications, AI will call specialized microservices as needed, executing tasks instantly without requiring users to switch between programs.
This shift redefines how software is built, distributed, and monetized. Future software marketplaces will not be app stores offering static downloads but AI-native service ecosystems where users subscribe to function-specific AI agents. Developers will no longer focus on selling standalone applications but on creating AI “skills” or “agents” that integrate into a broader AI-driven network. Monetization will move toward subscription and usage-based models, where businesses pay for AI capabilities on demand rather than purchasing traditional licenses.
For executives, this means the way companies develop, sell, and interact with software is changing fundamentally. The competitive advantage will go to those who adapt quickly—organizations that build AI services capable of integrating seamlessly into this new, frictionless ecosystem. The companies that stick to legacy software models will struggle to compete as AI redefines enterprise efficiency, scalability, and user expectations.
AI is a full-scale disruption
Generative AI is not just improving software; it is replacing the foundational model on which the software industry was built. The old system relied on scarcity—platforms controlled access, charged premiums, and locked services behind paywalls. AI removes these restrictions by enabling fluid, scalable, and infinitely adaptive solutions that do not depend on traditional software infrastructure.
This shift will not be gradual. The companies that fail to transition will not slowly lose relevance—they will be pushed out as AI-native systems take over. Businesses that rely on legacy distribution models, static applications, and platform-controlled marketplaces are already at risk. The ones that move quickly to integrate AI-driven services will redefine their industries.
The market is changing in real time, and companies need to position themselves at the forefront or risk being left behind. Investing in AI is not just about efficiency—it is about survival in a landscape where traditional software models are becoming obsolete. The question is simple: who is leading this transformation, and who is disappearing because they refused to adapt?
Key executive takeaways
- AI is replacing static software with dynamic services: Traditional applications are becoming obsolete as AI-native systems perform tasks seamlessly in real time. Leaders should prioritize AI integration to streamline operations and improve user experience.
- AI is disrupting marketplaces and software distribution: AI eliminates the need for standalone apps, threatening platform-controlled monetization models. Companies must pivot toward AI-driven service ecosystems or risk losing relevance.
- Control over AI models, interfaces, and data defines market leadership: The next industry leaders will dominate on three fronts—AI intelligence, seamless user interfaces, and proprietary data pipelines. Executives should invest in these key areas to maintain long-term competitive advantage.
- Industry-specific AI solutions will drive adoption: Businesses do not need broad AI—they need AI tailored to their specific workflows. Decision-makers should focus on implementing vertical AI solutions that deliver immediate, actionable value.
- Software is shifting to AI-first architectures: The old model of monolithic applications is being replaced by modular, AI-powered microservices. Organizations need to restructure software development around real-time AI integration to stay ahead.
- The shift to AI is a complete industry disruption: AI is not an incremental upgrade; it is eliminating traditional software business models. Leaders who fail to adapt will lose market relevance, while those who embrace AI’s potential will define the future of their industries.
