Software APIs & Containers in Response to AI

AI will make most every Software company feel pricing pressure.

AI will force Software companies to consider new business models in response to pricing pressure

• If my Software company does not have a competitive moat, if I sell workflow software and do not house years of customer data, and if my software is inexpensive to maintain, I am toast. AI will kill me.

• If my Software company houses all sorts of complex Enterprise data, or years of a particular Enterprise data set, or if my business is primarily selling data & analytics delivered via Software applications, at a minimum I will feel pricing pressure as customer organizations will be less willing to pay for my front-end (front-ends are generally easy to write and not terribly expensive to maintain).

  • AI will effectively turn Software companies into Containers (SaaC), or APIs.

  • Pricing pressure will be felt by almost every Software company.

  • The good news is that the API / Container business can be a great business, particularly if you have a unique data offering. Given a choice, I would prefer to sell API / Container access to my data versus selling the data plus the Software UI bundle. Users want Bloomberg’s data, Factset’s data, CEORater’s data, not the software wrapper.

---