Into 2026 - some AI realities that lie ahead as we correct some key agentic expectations

2025 was a roller coaster of a year as we watched both the pace of innovation and the pace of frustration evolve in the Artificial Intelligence (AI) space. Every tech cycle needs a monster, and for 2026, AI is being cast as the creature that’s going to “eat” software whole. We’re already hearing it on earnings calls, in pitch decks, and splashed across headlines: Software-as-a-Service (SaaS) is doomed, applications are dead, agents will replace everything.

Don’t believe everything you see on the Internet. AI isn’t swallowing software in 2026; in fact, it’s barely nibbling at the edges. The forces keeping applications alive are far more mundane than the hype would suggest: inertia, economics, and the inconvenient reality that AI still needs applications, and application data, to function.

Software will shrink in 2026, but it won’t be eaten by AI. It will be cut away ...