In the AI Era, Software Companies Are Becoming Consulting Firms

Over the past few decades, the software industry has had a very successful business model:
Develop a piece of software.
Then sell it to thousands of companies.
Microsoft, Oracle, SAP – all follow this logic.
What is the core competitiveness of a software company?
Product features.

But in the AI era, this model is changing.
Because enterprises are discovering:

Buying an AI tool does not mean the enterprise possesses AI capability.

For example, a manufacturing enterprise buys an AI system.
The vendor tells you:
We have large models.
We have intelligent assistants.
We have AI Agents.
It sounds very advanced.
But the questions the enterprise truly cares about are:
Has equipment failure decreased?
Has production efficiency improved?
Has inventory been reduced?
Has profit increased?

At this point, the problem emerges.
Traditional software sells: "a tool."
But in the AI era, what enterprises need is: "a result."

Why?
Because AI is not traditional software.
Traditional software:
rules are defined by humans.
systems execute according to processes.
But AI:
needs to understand the business.
needs to connect data.
needs continuous adjustment.
It does not end when installation is complete.
It continuously evolves after entering the enterprise.

01Why the FDE Model Is Becoming Increasingly Important

This is also why the FDE model is becoming increasingly important.
FDEs enter the customer site not just to deploy a system.
Rather, they help the enterprise redesign:
Which processes can be changed by AI?
Which roles can be enhanced by AI?
Which data can generate new value?

This means the role of software companies is changing.
In the past:
software companies sold products.
consulting firms solved problems.
The boundary between the two was very clear.
In the future:
AI companies may possess both capabilities simultaneously.
Both software technology.And industry understanding.

So future software competition may follow a new formula:
Not:
Number of features × Number of users.
But rather:

AI capability × Industry experience × Delivery capability.

This is also why many AI companies are emphasising FDE.
Because they have realised:

What is truly valuable is not selling AI.It is helping enterprises change.

02Software Companies and Consulting Firms Are Converging

In the future, a huge change may occur in the software industry:
Previously, enterprises bought software so that employees could use tools.
In the future, enterprises will buy AI so that the entire organisation can adopt a new way of working.

So software companies in the AI era may increasingly resemble consulting firms.
And consulting firms are increasingly resembling software companies.
The two are converging.

In the next issue, we discuss a more practical question:
Why FDE may become the most expensive talent in the AI era.