Source URL: https://tech.slashdot.org/story/25/04/21/1443240/over-100-public-software-companies-getting-squeezed-by-ai-study-finds?utm_source=rss1.0mainlinkanon&utm_medium=feed
Source: Slashdot
Title: Over 100 Public Software Companies Getting ‘Squeezed’ by AI, Study Finds
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Summary: The text discusses a recent AlixPartners study highlighting the precarious position of over 100 mid-market software companies due to competition from AI-native startups and tech giants. As generative AI advances, traditional enterprise software architectures are at risk, potentially leading to significant industry shifts in the next few years.
Detailed Description:
The AlixPartners study outlines critical challenges faced by mid-market software companies as generative AI alters the landscape of enterprise software. Here are the major points from the analysis:
– **Competitive Pressure**: Mid-market software firms are caught between innovative AI startups and well-established tech giants, creating a competitive “squeeze.”
– **Survival Threats**: Many of these companies are warned that their survival is at stake in the upcoming 24 months due to the rapid evolution of AI technologies.
– **Shift in AI Roles**: There is a notable shift from traditional AI tools as assistants towards AI applications that can function independently, potentially making existing Software-as-a-Service (SaaS) models less relevant.
– **Decline in High-Growth Companies**: The proportion of high-growth software companies dropped from 57% in 2023 to 39% in 2024, indicating increasing difficulty in achieving substantial growth.
– **Customer Retention Issues**: Customer loyalty is declining, evidenced by a reduction in median net dollar retention from 120% in 2021 to 108% in Q3 2024.
This analysis is crucial for security and compliance professionals as it signals a significant transformation in the software landscape driven by emerging AI technologies. The implications suggest organizations need to reassess their strategic positions, customer engagement, and technology investments to remain competitive amid these evolving trends.