Is Microsoft digging its own grave? The company realizes that users now favor AI agents over its office products like Excel, and this challenges the SaaS (software as a service) business model.
Microsoft jumped on the AI bandwagon very quickly, securing a head start over the competition by acquiring a stake in OpenAI (the company behind ChatGPT) and quickly developing its Copilot solution. But the publisher now realizes that this enthusiasm for AI will have consequences for its other activities, starting with Microsoft 365 (formerly Office) and its subscriptions providing access to its software suite.
Interviewed by Bill Gurley and Brad Gerstner in a Bg2 Pod podcast, Satya Nadella, CEO of Microsoft, spoke about this particular situation. He believes that professional applications as we know them today are at risk of disappearing. These software programs use CRUD (create, read, update, delete) databases, which can be exploited by users through the interface and algorithms.
Will ChatGPT, Copilot, and others bury other productivity applications?
AIs not only have access to these same CRUD databases, but they also add a layer of logic, artificial certainly, but functional. “Once AI is where all the logic is, the backends (the software layer that handles the data, but without a user interface) will start to be replaced, right?”, he believes. “Why do I need Excel?”, he even adds provocatively.
To keep users on its products, Microsoft integrates Copilot directly into them. They can therefore maintain their habits on their applications, while being helped by AI when they need it. Each software has its own interface optimized for very specific needs, so it will always have the advantage over a conversational agent like ChatGPT, which is certainly capable of responding to complex requests, but which will not always provide them in the best form, because of a unified interface that must take into account multiple constraints.
But if chatbots continue to improve, they could well take the place of our historical software. This trend has already started among individuals, and even among professionals.
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