Software
Enterprises bet on agents to build in-house software, boost productivity
A report released by McKinsey this week shows that large enterprises are expanding agentic AI applications faster than small and medium-sized enterprises, with usage growing rapidly. Based on a survey of over 1,700 employees, the report found that nearly a third of respondents gave up purchasing at least one software feature because they could build software themselves. Although agent tools have higher computing costs, technology leaders still see value and plan to increase investment.
CIO Dive Trendline on Top 5 stories from CIO Dive
Walmart's Chief People Officer, Donna Morris, revealed at the MIT Technology Review EmTech AI Summit that the company plans to provide AI skills training to 2.1 million employees over the next few years, covering all roles from technical teams to store greeters. Currently, AI certifications for 1.7 million employees in the U.S. and Canada are now available, with training aimed at integrating agentic AI into employee workflows to reduce friction and enhance customer experience. Morris emphasized that AI adoption has not led to job reductions, with the company's workforce size remaining the same as six years ago, while revenue has grown significantly.
How CIOs can navigate a disrupted software market
The software industry is undergoing disruptive changes driven by AI. Research released by Forrester this month shows that AI will replace or weaken existing software platform features. CIOs need to look beyond short-term financial impacts, review their vendor portfolios from a long-term perspective, identify commoditized features, and address the risk of uncontrolled AI spending.
SAP aims to ‘build AI at scale’ for the enterprise
In its Q2 earnings call, SAP reaffirmed the central role of its AI strategy, with cloud revenue up 24% year-over-year and total revenue reaching $11.24 billion. CEO Christian Klein highlighted ERP migration as a growth driver and emphasized the vision of the autonomous enterprise. The company launched the SAP Business AI Platform and Autonomous Suite, acquired Dremio and Reltio to strengthen its data foundation, and expanded collaborations with Google Cloud, Microsoft, Snowflake, and Nvidia. Internally, it is also advancing AI talent recruitment and employee skills transformation, aiming to cover over 90% of its workforce.
IBM attributes mainframe revenue collapse to delays, not destruction
In the quarter ending June 30, IBM's infrastructure segment revenue fell 7% year-over-year, with IBM Z mainframe business revenue down 42% year-over-year. The company attributes this to customers postponing capital expenditures due to chip shortages and rising hardware prices, rather than customer attrition. CEO Arvind Krishna stated that one-third of deferred deals were completed within three weeks after the quarter ended, indicating demand remains.
End-user AI spending to soar as CIOs grapple with costs
Gartner's latest forecast shows that global end-user spending on AI models and platforms will jump 63% from last year's base, reaching $64 billion. As costs rise, CIOs are more strictly reviewing AI budgets, focusing on usage efficiency, cost control, and measurable results. Analysts point out that agentic AI drives most model spending to be embedded in platforms, and model vendors are transforming into platform intelligence providers, with competition shifting toward enterprise end-to-end workflows.
How to keep AI costs in check as agentic drives usage
Against the backdrop of agentic applications accelerating AI usage growth, the difficulty for enterprises to control AI costs has not been alleviated by falling token prices. Flexera's survey shows that about three-fifths of IT professionals report an increase in AI overspending, and more than two-thirds lack visibility into AI software usage. In a blog post on Tuesday, OpenAI proposed five recommendations to help enterprises manage spending and understand AI usage and value creation in the agentic era.
Engineering teams will shrink as AI shifts responsibilities
Gartner's latest research predicts that by 2029, 60% of organizations will adopt smaller software engineering teams, a significant increase from 15% this year. AI agents taking on more routine technical tasks will drive engineering departments to reorganize into agile groups of 4-5 people, but this model is not aimed at cost reduction, but rather to better combine AI with human expertise.
Agentic AI to disrupt $234B in SaaS spending: Gartner
In a report released last week, Gartner stated that agentic AI is reshaping the enterprise application software market, expected to impact up to $234 billion in spending by 2030. As AI agents complete tasks across systems, users' reliance on traditional software interfaces decreases, accelerating the shift of SaaS pricing models from subscriptions to outcome-based approaches. The report warns that traditional vendors failing to adapt to this transition may face survival crises, while those embracing agentic capabilities will gain new revenue opportunities.