Why ‘AppGen’ is an existential threat to the enterprise app industry

Enterprise software’s shifting landscape and the emergence of AI-powered low-code development platforms are fundamentally altering how organizations approach their software needs, moving from buying off-the-shelf solutions to building custom applications.

The AppGen revolution; AI-powered application generation (AppGen) platforms are emerging as a transformative force in enterprise software development, enabling organizations to create custom applications more efficiently than ever before.

• Low-code development platforms have already begun shifting enterprises away from pre-packaged software solutions toward custom-built applications that better meet their specific needs
• The integration of AI capabilities into these platforms significantly reduces the technical expertise required to develop sophisticated business applications
• Companies are increasingly opting to “build” rather than “buy” their software solutions, leveraging AI-powered platforms to create tailored applications

Market implications; The rise of AI-powered AppGen platforms presents a significant challenge to traditional enterprise software vendors.

• Industry insiders acknowledge the existential threat, with one vendor candidly stating that “In 10-15 years, people won’t be buying our software”
• The competitive advantage of domain knowledge historically embedded in off-the-shelf business applications is eroding as AI platforms become more sophisticated
• Market consolidation appears inevitable as enterprises begin retiring multiple separate applications in favor of custom solutions built on unified AppGen platforms

Technical considerations; While the trend toward AI-powered custom development is clear, certain limitations and exceptions remain.

• High-risk areas and specialized functions may continue to rely on proven off-the-shelf solutions
• The migration to custom-built applications will likely occur gradually as organizations build confidence in AI developer tools
• Generic business applications face the greatest immediate threat from this technological shift

Looking ahead; The enterprise software landscape is poised for dramatic transformation over the next decade, though the pace and extent of change may vary across different sectors and use cases. Some specialized software providers will likely adapt by offering their domain expertise through AI-enabled platforms, while others may struggle to remain relevant in an increasingly build-focused environment.