Agentic AI will Split the IT Market into Winners and Losers

What is agentic AI, and why does it matter specifically for the industry you operate in?

 

Agentic AI is the next natural, powerful step of the AI revolution. It can help you set up executable steps in the right order and orchestrate your work—whether it is programming, setting up tests or writing documentation. Put into stricter contexts, agentic AI can execute actions like programming via tools, and pursue simple goals, rather than just respond to prompts.

 

It will be used extensively in contexts where the programming work is easier to predict—for instance, in a large support programming and maintenance center where many developers are given isolated tasks to be performed repeatedly and within certain boundaries. 

 

It will also challenge less complex isolated application software companies, since it can automate large parts of the construction of code and testing. So, if you are in the software business building and maintaining more peripherical, standalone applications, you would need to quickly adjust and start using agentic AI to stay competitive.

 

We will soon all be able to build small ticket systems, apps, CRM systems, webpages and simple portals. So-called regulatory systems of record—complex, data-critical and with numerous deep integrations and functional performance requirements—will not be replaced by agentic AI. These system complexes are completely different animals.

 

However, there is no doubt that AI could and should be used inside these systems to realise their huge potential for automation and decision support. This will create an increasing demand to renew and renovate these older systems and eventually replace them with embedded AI-ready regulatory systems. Replacing them requires IT vendors who have the domain knowledge, replacement platforms and the knows about AI.

 

Many investors believe AI will hollow out the software industry and compress margins. Why is that narrative wrong—and who is most vulnerable to disruption right now?

The narrative isn’t wrong for software companies with peripheral solutions. The opposite is likely to happen for the regulatory large complex system providers, but only if they are ready to take the opportunity and renew their own delivery model. In those cases, this is the moment of opportunity that must be seized.

 

The software market will hence be split into AI-era winners and losers. Losers will be vendors of simple software and firms selling commoditized programming capacity, or programming skills by the hour.

 

The winners will be providers of core transactional platforms in regulated mission-critical environments—especially those embedding AI across their entire delivery model. These winners will gradually create the new societal and business critical systems of the world—replacing the ones who have been built over the last four decades.

 

What naturally shields certain firms from AI disruption?

 

If you are spending 80 percent or more of your time with the customer—defining, scoping, analyzing—the customer needs to become more productive or competitive. You are already on the right track in terms of not being disrupted.

 

On the other hand, if the main part of your activity is building and programming, you need to look at how to change your operation quickly.

 

In my opinion the following are the most important protective characteristics: Regulation and legislation; a high level of functional and technical complexity; a large number of integrations and dependencies; a high level of performance requirements; sovereignty issues; and data ownership. 

 

Furthermore, if you take a fixed-price responsibility delivering end-to-end solutions where these characteristics apply, you have a promising market.

 

How does all this shape Netcompany’s strategy?

 
We deliver high-end, complex solutions to highly regulated industries—for example, government, tax and customs, transportation, the finance industry.

 

If anyone asks, “Can I buy five people by the hour?” I say no. I need those people to build mission-critical, end-to-end solutions where we are responsible for delivering the outcome the customer is looking for.

 

We will always bring our own core technology to the table, in the form of new tech platforms and vertical products that we use in these regulated industries. A technology foundation that is ready for embedded AI is one where the customer is still in control of application and data. Hence, we do not need to build everything from scratch. And of course we use responsible agentic AI in setting up these solutions.

 

We always embark on long-term strategic journeys and contracts with customers to responsibly replace what typically are older systems with the new AI-ready platforms 

 

How do you see AI reshaping regulated sectors like banking, pensions and the public sector—and why are these areas primed for a new investment cycle?

 

Decision-makers didn’t know much about AI two years ago; now they’re starting to get it, and they see the huge potential for automation and decision support in many of their essential business flows, giving them access to a completely different competitive position.

 

They may not adopt AI at this stage, but the competition will. If you are a bank, pension company or a government body you will need to look at what will typically be a very large IT department and the legacy system that you have been maintaining for decades. You will need to find a partner who has an AI-ready platform or product and the capability to modernize your it landscape and your organization. We are that partner.

 

What does this mean specifically for Netcompany’s growth and pricing power—and what should investors and CEOs be doing right now?

 

I’ve been waiting not only for the technology to mature but for CEOs to realize how much this can change their entire business.

 

The business case for renovating or completely rebuilding regulated solutions in government and critical industries is very promising. Many more regulated and complex solutions are now up for legacy modernization to become “embedded AI-ready”. As a modern European IT vendor, Netcompany is the perfect match for these transactions, and we’re ready to take on the responsibility.

 

Investors should pay attention to the companies winning the big transformation and legacy modernization programs in Europe and bringing embedded AI to life. So should any CEOs in a hurry to do the same for their own organizations, and who need to find a partner with the platforms and capabilities to guide them to success.