Changes in IT procurement by US companies: from "software applications" to "data + AI agent"
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Corporate IT budgets are being reallocated—more and more money is flowing toward AI, while traditional SaaS software is losing its formerly unshakable position.
According to a recent report by The Information, as companies increase spending on AI vendors like Anthropic and OpenAI, traditional enterprise software and IT service providers are facing the pressure of budget cuts. This trend is evident in both large multinational corporations and small to medium-sized companies and is reshaping the fundamental role of software in enterprises.
The logic behind this change is not complicated: AI Agents can now automatically complete tasks that previously required specialized software, prompting companies to re-examine the software subscriptions they have used for years and ask themselves one question—do we still need this?
Large Enterprises: Some Are Cut, Some Become More Deeply Integrated
French biopharmaceutical giant Sanofi offers a typical example.
Sanofi is using AI Agents based on Anthropic's Claude Code and self-developed software by AI startup Elementum to replace some of ServiceNow’s IT management functions, the latter being a mainstream SaaS platform in enterprise IT management.
At the same time, Sanofi’s reliance on German software giant SAP has deepened. Sanofi connects its own AI Agent with SAP’s AI Agent to automatically audit purchase orders—a task previously handled by an Indian outsourcing company. The result: outsourcing costs dropped, and SAP’s position became stronger.
This shows that the AI wave is not simply about “replacing traditional software”—it is redefining which software is worth keeping and which can be replaced.
Julie Teigland, Global Vice Chair at consulting firm EY, says her clients are using AI to integrate enterprise applications. She stated, AI clients “are seriously examining the technical debt they have accumulated over the years, asking themselves: how can we make all this simpler and easier to migrate?”
Small and Medium Enterprises: Faster Replacement, Salesforce Gets Hit First
Compared with large enterprises, small and medium companies are acting more decisively in replacements.
Family clothing business Mixology has 500 employees and 16 physical stores. The company began using Palantir software last year to develop custom AI applications for generating social media ads, demand forecasting, and scheduling management, and simultaneously plans to cut back on Salesforce usage.
Mixology CEO Jordan Edwards said directly, “Before discovering Palantir, my whole business ran on Salesforce. But now I’m not sure it’s still necessary.” “In theory, anything we did in Salesforce could be done in Palantir.”
For large customers, completely ditching Salesforce is still extremely difficult. But for smaller clients, replacing it with AI solutions is increasingly feasible.
Bloomberg also reported on Thursday that Starbucks is the latest major software customer seeking to use AI to replace major applications from companies such as Microsoft and IBM.
The New Role of Traditional Software: From ‘Functional Tool’ to ‘Data Warehouse’
The case of Israeli cryptocurrency management software startup Utila reveals an even deeper trend.
According to The Information, Utila cut applications from 10 small software vendors including Clay and Vendelux, which originally covered customer data tracking, email marketing, event management, sales prep, and more. Now, all these functions are handled by startup Swan AI’s sales and marketing software and AI Agent.
Utila's marketing director Din Arbel said this adjustment directly reduced the company’s software budget by 50%.
But HubSpot was kept—for one reason only: data.
“We’re still using HubSpot, but only for data storage,” said Arbel. Swan AI’s Agent needs to access customer data stored in HubSpot to complete tasks. HubSpot previously indicated to investors it plans to charge external Agents for data access, but Arbel said he would still continue using it even so.
This example clearly shows the changing role of traditional SaaS: from a functional executor, it is degrading to a data storage layer.
GitHub Under Siege: Code Repository Business Faces Multiple Attacks
Meanwhile, Microsoft’s GitHub core business is also facing competition from various sides.
GitHub once had a lead in the AI programming field with GitHub Copilot, but that advantage is gradually shrinking. Now, even its most basic business—providing a code repository and collaboration platform for developers—is starting to be eroded.
According to The Information, AI programming tool Cursor recently announced a competitive code repository product. OpenAI President Greg Brockman said Wednesday the company had recruited former GitHub Senior Director Taylor Blau to “plan the future of Git,” hinting that OpenAI is advancing developer tools directly competing with GitHub.
The newest entrant is the startup Entire. Founded by former GitHub CEO Thomas Dohmke, the company completed $60 million in financing earlier this year. Entire announced Wednesday the launch of its own Git code repository product, supporting code storage and collaboration, focusing on higher stability.
Dohmke said Entire rents servers from the world’s three largest cloud providers, deployed across multiple regions to increase speed and reliability. He stated, “One way to solve outages is to add redundancy and distribute globally, which will support large-scale use by AI Agents and humans.”
GitHub, on its blog Wednesday, admitted it had six outages last month and is moving more systems from its own servers to Microsoft Azure Cloud to reduce outage frequency.
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