Software is the Service

Since the beginning, software has been on a steady path toward decentralization, hyperdistribution, and reduced costs. AI is the stage 2 rocket.

Mainframe Era (1950s-1980s)

The enterprise software purchasing journey began with the mainframe era, where companies bought expensive hardware systems from companies like IBM and then licensed software separately. During this period:

• Hardware was the primary expense (often millions of dollars)
• Software was typically custom-developed or bundled with hardware
• Purchasing decisions were highly centralized through IT departments
• Long sales cycles with extensive negotiations were common
• Contracts often spanned 5-10 years with substantial maintenance fees

Client-Server Era (1980s-2000s)

In the 1980s-1990s, the shift to client-server architecture fundamentally changed software purchasing. Companies like Oracle, SAP, and Microsoft introduced packaged enterprise applications that ran on networks of personal computers and servers. This era introduced perpetual licensing models where companies paid a hefty upfront fee for the right to use the software indefinitely, plus annual maintenance fees of 15-25% of the original license cost.

Key characteristics included:

• Decentralization of purchasing power
• Complex licensing models (per seat, per CPU, enterprise-wide)
• Lengthy implementation cycles
• Customization services as a significant revenue stream

Early Web & ASP Era (Late 1990s-2005)

In the late 1990s, Application Service Providers (ASPs) attempted to deliver applications over the internet, offering an early version of subscription-based software. However, limitations in bandwidth, security concerns, and immature technology led to mixed results for many early ASP ventures.

SaaS Revolution (2005-Present)

The Software-as-a-Service (SaaS) model emerged as a transformative approach to software purchasing. Pioneered by companies like Salesforce with its "No Software" campaign, SaaS introduced subscription-based models where software is centrally hosted and accessed via web browsers. This shift eliminated the need for on-premises infrastructure and significant upfront capital expenditures.

SaaS fundamentally changed purchasing patterns:

• Shift from CapEx to OpEx spending models
• Shorter contracts (often annual or monthly)
• Reduced implementation times
• "Land and expand" sales strategies are becoming dominant
• Freemium and product-led growth models are emerging
• Departmental purchasing power is increasing (shadow IT)

Cloud Era (2010-Present)

The cloud computing revolution further transformed software purchasing. Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) models emerged alongside SaaS. Companies increasingly moved to consumption-based models, paying only for what they use. The rise of cloud marketplaces from AWS, Microsoft Azure, and Google Cloud has created new procurement channels.

AI's Impact on Enterprise Software Purchasing

AI is now driving the most profound transformation in enterprise software purchasing, fundamentally reshaping what companies buy, how vendors create solutions, and who provides them.

The Hyperdistribution of Enterprise Software

The AI revolution has accelerated the distribution of software purchasing and creation across organizations. Unlike previous eras where software remained centralized despite shifting business models, AI-powered tools have dramatically lowered barriers to entry, creating a hyperdistributed software ecosystem. This shift enables:

• Domain experts to build specialized solutions without deep technical expertise
• Individual departments to deploy AI-powered tools tailored to their specific workflows
• Companies can address edge-case business processes with custom solutions rather than compromising with generic platforms

The Rise of Domain-Expert Providers

The most significant shift in this new landscape is the emergence of domain-expert software providers. Unlike traditional vendors offering horizontal solutions, these specialists combine:

• Deep industry knowledge with AI capabilities
• Contextual understanding of specific business challenges
• Ability to translate domain expertise into purposeful AI implementations

This new breed of provider is increasingly outcompeting generic solution vendors by delivering higher business value through tailored applications that genuinely understand industry-specific workflows and terminology.

The Custom Solution Renaissance

The most transformative aspect of AI in enterprise software is reversing a decades-long trend toward packaged applications. Companies can now access custom solutions at the same or lower cost than off-the-shelf products due to:

• AI-powered development tools are dramatically reducing coding requirements
• Low-code/no-code platforms with sophisticated AI capabilities built in
• Generative AI is accelerating development cycles from months to weeks or days
• The ability to build precise custom solutions rather than paying for unused features

This shift is mighty for mid-market companies that previously couldn't afford custom solutions but can now access tailor-made software previously available only to large enterprises.

The New Selection Paradigm: Teams Over Products

The fundamental transformation in enterprise software purchasing is the shift from product selection to team selection – a profound change in how organizations approach software procurement. The primary purchasing decision is increasingly not "which product to buy" but "which team can take us to the promised land."

• Evaluation criteria now focus on the provider's domain expertise and ability to translate business needs into solutions.
• RFPs are being replaced by collaborative workshops where teams demonstrate understanding of business challenges.
• Purchasing decisions increasingly consider the quality of the ongoing partnership rather than just feature lists.
• Trust and alignment with business objectives outweigh traditional technical evaluations.

The New Software Partnership Model

The relationship between organizations and software providers is evolving from vendor-client to true partnership.

• Continuous co-creation rather than periodic releases
• Deep integration of provider teams with internal processes
• Knowledge transfer is becoming a central component of engagements

Looking Ahead: The AI-Native Enterprise

As this transformation accelerates, we're witnessing the emergence of the AI-native enterprise—organizations built around the assumption that software should be tailored precisely to their unique business needs and continuously evolve. For these organizations:

• Software is a competitive differentiator rather than a necessary cost
• Business outcomes, rather than IT considerations, drive technology decisions
• The line between building and buying software becomes increasingly blurred
• Internal capabilities focus on orchestrating an ecosystem of specialized solutions

The ultimate impact of AI on enterprise software purchasing isn't just technological—it's a fundamental reimagining of how organizations create, acquire, and leverage software.

The winners in this new landscape will be those who recognize that the most outstanding value comes not from which products they buy, but from which teams they partner with to build their unique digital future.

About Slingr

Our team-first approach sets us apart—we're not just another platform provider, but your dedicated partner in continuously optimizing operations. We understand digital transformation is an ongoing journey, not a one-time product purchase. Our team excels at helping businesses navigate change, implement intelligent workflows, and extract maximum value from their technology investments.

SLINGR leverages the best available tools to create meaningful business solutions tailored to your needs. Combining low-code efficiency with enterprise-grade architecture empowers organizations to adapt quickly to today's rapidly evolving technology landscape.

Learn more at slingr.io