Artificial intelligence may be transforming the software industry, but concerns about widespread job loss are likely exaggerated. Similar to early predictions that e-commerce would replace physical retail, claims that AI will replace most enterprise software miss important context. According to Ned Davis Research, while tool-centric categories like marketing technology and analytics face real disruption, most software platforms remain vital for managing core workflows, governance, compliance, and data integrity.
This recent report, published by NDR’s Chief Thematic Strategist, Pat Tschosik, CFA, CMT, evaluates over 100 software companies across 15 industries and reveals a far more nuanced picture than the market’s recent sell-off suggests. Many software categories are positioned not to compete with AI, but to coexist with it in areas like cybersecurity, cloud infrastructure, and data management, AI is likely to increase demand rather than diminish it. Yet these lower risk, AI beneficiary sectors have been some of the hardest hit in the recent downturn, suggesting potential opportunity.
The research suggests that robust software platforms will adapt, much like leading retailers did during the internet era. Only a small group of feature-focused tools face genuine replacement risk. For investors and operators, identifying which industries fall into the “Replaced,” “Coexist,” or “Enhance” categories will be essential for navigating the next phase of AI adoption.
To view the full rankings, industry breakdowns, and the list of “AI Software Survivors,” please complete this form to access the full report.
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