Ep067: Market Trends in the Software Industry with Jonathan Shulman, Senior Partner with McKinsey and Company

Jonathan Shulman, Senior Partner at McKinsey & Company, highlights the transformative potential of AI in the software industry and the evolutions needed to capture emerging market opportunities.

Topics Include:

• AI's transformative potential in the software industry.
• Why AI is a massive business opportunity.
• Software industry evolution: Mainframe to Cloud SaaS eras.
• Potential entrance into a new AI-driven era.
• AI spend forecast: $15B to $200B by 2026.
• Most AI spend repurposed from existing IT budgets.
• Legacy software spend likely shifting towards AI.
• Importance of targeting specific, high-impact AI use cases.
• Key areas disrupted: sales, marketing, software engineering.
• AI's adoption rates vary by industry and function.
• Four waves of AI: predictive to agent-based.
• Most companies are still in early AI stages.
• Prioritize building agentic, end-to-end AI solutions.
• Winning companies invest disproportionately in AI innovation.
• Position offerings to tap into AI-specific budgets.
• Deliver complete workflows, not isolated point solutions.
• Generative AI accelerates development and iteration cycles.
• Scaling AI pilots remains a major industry challenge.
• Tool fragmentation undermines productivity and innovation.
• Change management critical for successful AI integration.
• Rethinking team roles and processes for AI deployment.
• Consumption-based pricing models gaining industry traction.
• Shift from perpetual to subscription to consumption models.
• Balancing value-driven and cost-efficient consumption pricing.
• AI market poised to redefine IT and business landscapes.

Participants:

• Jonathan Shulman – Senior Partner, McKinsey and Company

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