The End of Software Moats Is Closer Than You Think

For decades, enterprise software companies have depended on complexity, integrations and proprietary workflows as a moat. Locking in the customer used to mean winning the deal and keeping it for years—if not decades.

But what happens when your “competitive advantage” becomes your customer's biggest frustration?

We're witnessing the collapse of traditional software moats in real time. The shift toward outcome-based, agentic technology is not on the horizon. It's already here.

“We’re Buying Software to Bridge Our Old Software”

That’s a quote from a conversation I had with a C-level tech executive at a global enterprise. It sums up the moment perfectly.

“We’re buying software today to bridge our old software.”
“If I’m evaluating one solution, I’m going deep with three others.”
“A moat is useless if I can’t experience its value. What I want is the easy button that gets even easier over time.”

He’s not the only one feeling this way. Buyers today are overwhelmed with fragmented tools and bloated platforms that require massive engineering support to integrate and operate. SaaS vendors call it stickiness. Buyers call it friction.

And now they have options.

Agents > Apps

Most enterprise workflows don’t live in a single platform. Consider onboarding a new employee: it touches payroll, benefits, access management, training, compliance, hardware provisioning—and typically no one system handles it end-to-end.

But what if an agent could?

Agentic systems aren’t just executing workflows. They’re learning, adapting and making decisions in real time. They can operate across tools, departments and datasets—using natural language instead of code or complex UIs.

They don’t require the user to log into five different tools. They just get the job done.

It’s a shift in how software delivers value.

The Monetization Question

If your pricing is based on seats, logins or feature gates, what happens when the end user is no longer a human?

What happens when agents are the ones using your product?

We’re entering a world where seat-based pricing breaks. Where interfaces matter less than outcomes. Where the most valuable product may not even be seen—it’s working quietly in the background, orchestrating value.

Three Big Questions

As we look across the portfolio and the market, these are the questions we’re asking:

1. How will we monetize agentic technology?
   If seats and features are no longer the unit of value, what is?
   
   
2. Who builds the winning agents?
   Will legacy SaaS platforms adapt, or will startups unbundle functions and win with nimble, vertical solutions?
   
   
3. If the agent is the UI, does software still need one?
   When business gets done through conversation—text or voice—what role does interface even play?
   
   

What This Means for Founders

Startups that build with AI agents from day one have a profound advantage. They’re not weighed down by UX expectations rooted in 2010s SaaS. They’re not fighting to maintain “moats” that customers are actively trying to bypass. They’re building for a world where software does, not just displays.

As a founder, this is your opportunity to rethink:

• How you measure product value
  
• How you design onboarding and activation
  
• How you price based on outcome, not usage
  
  

It’s time to stop thinking like a SaaS company and start thinking like a systems company.

Final Thought: The Moat Is the Outcome

Software moats used to mean switching costs, integrations and complexity. Now, they’re liabilities.

In the world of AI agents, the new moat is the one thing customers will always pay for: results.