The rise of AI does not spell the end of software companies, but it does mark a tipping point for the sector. According to ServiceNow COO Amit Zavery, the software industry will not be wiped out by AI, but only those companies that actually adapt their products, architecture, and strategy will survive.
AI does not function as a separate tool, but as a structural part of modern software platforms, Zavery explains to Bloomberg Television.
In recent years, the company has deeply integrated AI into its platform, leading to strong growth in AI-related revenue. According to Zavery, this development underscores that AI creates value primarily when it is integrated into existing business processes and workflows. Software vendors who continue to position AI as a separate functionality or experiment are missing the point of the transformation. For customers, it’s not about access to models, but about solutions that are reliable, manageable, and scalable.
This shift places new demands on software companies. Simply offering AI functionality is no longer enough, especially for enterprise customers. Without built-in security, compliance, auditing, and control, there is insufficient confidence to deploy AI at scale. According to Zavery, this is precisely where the distinction is made between suppliers that will continue to exist and those that will fall behind. AI requires governance and visibility, not just computing power or smart algorithms.
Clear realignment
This development fits into a broader pattern the sector has seen before, during the transition to the web and later to cloud computing. Back then, software companies did not disappear en masse, but there was a clear realignment. Suppliers who did not adapt their technology in time lost relevance, while others grew by embracing the new paradigms. AI now poses a similar test for the adaptability of software companies.
According to Zavery, this will inevitably make the market more selective. Not because AI automates everything, but because differences between software suppliers will become more visible. Companies that use AI to actually help customers transform will experience AI as an accelerator. For parties that remain stuck with separate tools or limited implementations, AI will increase the pressure. Consolidation is not a goal in itself, but a logical consequence of divergent strategic choices.
AI is also changing the role of software internally. The focus is shifting from traditional IT solutions to broader support for employees and customers. AI is being used to improve interactions, better understand intentions, and solve problems faster across IT, HR, finance, and customer service. As a result, AI is shifting from an innovation project to a core component of daily business operations.
A crucial prerequisite for this is security. As AI becomes more deeply intertwined with processes and data, the importance of security also increases. The strong growth of AI-related security activities shows that trust and control are essential for sustainable adoption. Software companies that do not structurally incorporate this into their products will find it difficult to serve large organizations.
The message to the sector is therefore clear. AI will not replace software companies, but it will force them to make fundamental choices. Only suppliers who fully integrate AI into their platform, with an eye for management, compliance, and scalability, will remain relevant. For the rest, the same outcome as in previous technological revolutions looms: not because the sector will disappear, but because standing still is no longer an option.