software PM market analysis

The dominant signal in software today is AI’s transition from discretionary tooling to embedded enterprise infrastructure. A Bank of America analyst has characterised AI spending as increasingly non-optional, with projected cloud capital expenditure potentially reaching a scale not previously seen in the industry, according to reporting by 24/7 Wall St.

That conviction is running into structural friction at the commercial layer. Microsoft’s recent layoffs have brought its AI sales model into sharper focus, with enterprise buyers navigating an unresolved tension between established per-seat licensing and newer consumption-based pricing structures, as noted by ERP.today. How quickly that transition resolves will influence near-term revenue trajectories across the sector.

On the tooling front, Amazon’s launch of Kiro — a purpose-built agentic IDE — opens a new competitive front in developer infrastructure, where specialised AI tools are multiplying and carving out distinct niches. The spending environment is constructive, but the sector is still working out which platforms and pricing models will prove durable. The evidence is broadly positive but the resolution of key commercial tensions keeps the outlook cautious.

Worth Tracking

Microsoft per-seat vs. consumption pricing transitionThe pace at which enterprise customers migrate to hybrid pricing will determine whether AI revenue growth offsets declines in traditional licence income.

Agentic IDE competition — Kiro and rivalsAmazon's entry into agentic development environments directly challenges existing AI coding tools; which platform becomes the enterprise default will matter for developer tooling spend.

Cloud capex vs. demonstrated enterprise ROIThe Bank of America projection implies a substantial spending ramp; sustained commitment will depend on measurable productivity or cost outcomes, and a gap there could prompt reassessment.