I think the notion that business applications exist, that's probably where they'll all collapse right in the agent era. Microsoft's CEO Satya Nadella said, apps as we know them are going away in favor of agents, and this is a huge statement.

He basically put a flag in the ground showing where the future of software development is going.

No more applications, which means no more SAS, which also means likely far fewer developers. So let's watch the video and I'm going to break it down for you.

So this is on the BG Squared podcast. I'll drop a link to the full interview down below.

SAS applications or Biz Apps. So let me just speak of our own Dynamics thing. The approach at least we're taking is, I think the notion that business applications exist, that's probably where they'll all collapse right in the agent era because if you think about it, right, they are essentially CRUD databases with a bunch of business logic.

Okay, I'm going to pause there because what he just said might sound like no big deal, but it is actually a stunning proclamation of the future.

What he essentially said is that SAS, and that means software as a service, is essentially just a thin UI layer on top of a database.

And when he says CRUD, that means create, read, update, destroy. Those are the base units of interactions between an interface and a database.

So create, create a new record, read, extract information from the database, update, make a change to an existing record, and destroy, delete. So all he's saying is there's going to be the underlying database, the fundamental data of what you need, and then it's going to be agents that are interacting directly with the database.

And if you've been watching this channel at all, you know I've been talking about this for a long time I truly believe the entire application stack is going to disappear.

There just really is no need for it when you have artificial intelligence interacting with the core grounded data that sits within a database.

And again, what does that actually mean for the entire SAS industry? What does that mean for application developers?

I don't know exactly, but I have a feeling it's going to look vastly different than it looks today. And I've been in SAS my entire career.

I have built multiple SAS companies, I've worked for SAS companies, and if I'm being transparent, I probably wouldn't start another SAS company right now, and I probably wouldn't invest in any SAS companies right now either.

It's just too unknown. Now, that isn't to say there won't be software companies in the future, it's just going to look drastically different.

Let's keep watching. Crowd databases with a bunch of business logic, the business logic is all going to these agents and these agents are going to be multi-repo crud, right?

So they're not going to discriminate between uh what the back end is, they're going to update multiple databases and all the logic will be in uh the AI tier so to speak.

I'm so excited to show you this video. This three and a half minute video might be the clearest depiction of what the future of software engineering is going to look like.

Now when he's talking about business logic, he basically means taking that core data found in a database and actually doing things with it, whether it's updating a CRM record or sending out emails based on different criteria found in the database or anything, any single piece of software that sits on top of a database, that is what he's talking about.

All of that business logic is going to be compressed into the agent.

The agent will be able to accomplish anything, and all you need to do is tell it what you want. Give me a graph of my top five customers by revenue.

Okay, now write emails to all five of those customers telling them I want to do business with them in 2025.

All of this will just automatically be done where previously it would take hard-coded business logic on top of the database. Now that's not necessary. You just tell the agent what you want, and it will either know how to accomplish it or write tools to go accomplish it on your behalf.

And when I say tools, I just mean it's going to write its own code to interact with the database, to send an email, and so on.

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And once the AI tier becomes the place where all the logic is, then people start replacing the backends, right? We people, you know, that's what, you know, in fact, it's interesting as we speak, I think we are seeing pretty high rates of wins on Dynamics backends, um, and the agent use.

And we are going to go pretty aggressively and try and collapse it all, right? Whether it's in customer service, whether it is in, you know, uh, by the way, the other fascinating thing that's increasing is just not CRM, but even our what we call finance and operations, uh, because people want more AI native Biz apps, right?

Another thing that he clearly says is the backend doesn't matter. The agents aren't specialized in one type of database, they really don't care. So really it's about building the database that works most efficiently with the agent, is cheapest, is the right for the right use case.

So as an engineer or a data provider, you really just need to figure out what's the best database to use and then the agents do not care.

And so it's going to be interesting on how companies choose the database that they decide to use.

That means the biz the logic tier can be orchestrated by AI and AI agents. So in other words, Copilot to agent to my business application should be very seamless.

Now, in the same way, you could even say, hey, why do I need Excel? Like, Interestingly enough, one of the most exciting things for me is Excel with Python is like GitHub with co-pilot, right?

That's essentially so what we've done is when you have Excel like this, by the way, will be fun for you guys, right?

bring up co-pilot and start playing with it because it's no longer like, oh, you know, it is like having a data analyst, uh, and so it's no longer just making sense of the numbers that you have, it will do the plan for you, right?

It will literally, like how get up Copilot workspace creates the plan and then it executes the plan. It, this is like a data analyst who is using Excel as a sort of R column visualization to do analysis scratchback.

So he is saying, why do you even need Excel? And he probably has thought a lot about this because really what is Excel?

It is a thin UI layer on top of a database and of course you can add a bunch of business logic and analytics.

But here's the thing, what he's describing is essentially if AI can write Python code to analyze the data, why do you need Excel at all?

And he might be right, he probably is right. Why do you need Excel if I need an analysis of a huge amount of data?

I just say what I need. I just need to describe the end product. I need a graph, I need a chart, I need a 3D visualization, whatever it is.

You just describe the end result, you have the core data, the raw data, and then the agent writes the Python code to actually extract the right data and put it in the right format for what you asked.

Now let's keep watching, so it's got a tools you.

So the co-pilot is using Excel as a tool with all of its action space because it can generate and it has Python interpreter that is in fact, and by the way, when he says Python interpreter, that just means the ability to execute Python code, in fact, a great way to reconceptualize Excel and at some point you could say, hey, I'll generate all of Excel, uh, and that is also true.

After all, there's a code interpreter, right? So therefore, you can generate anything. Um, and so yes, I think there will be disruption, but so the way we are approaching at least our M365 stuff is one is build Copilot as that organizing layer UI for AI, get all agents including our own agents, you can say the Excel is an agent to my Copilot, Word is an agent, it's kind of specialized canvases which is I'm doing a legal document, let me take it into pages and then to Word and then have the Copilot go with it, uh, go into Excel and have the Copilot go with it.

This is a fundamental change in how Microsoft applications work and really any software as a service business. This is a complete restructuring of the entire industry and for somebody who has been in SAS for so long, it is so fascinating to watch and companies are either going to adopt it and kind of evolve with the times or they're going to die.

There is no in between and it's clear that Satya from Microsoft is thinking well ahead.

He is already very invested into OpenAI. He already has the best model. He's already thinking about Copilot, whatever you think about Copilot and its quality today, at least the structure, the architecture of how it's going to work in the future is clear and right in my opinion.

And so that's the whole video and it's again only three and a half minutes, but clearly lays out what the future of software will look like.

All he's talking about is enterprise software, business software, but at the same time that can be applied to consumer as well.

What's the difference where a consumer, it's just a database and you're getting a different type of on top of it. And so if you had an agent, why do you need the interface at all?

The future of software development, the future of application development, the future of interaction with data is going to be drastically different than it is today, and I'm so excited for it.

If you enjoyed this video, please consider giving a like and subscribe, and I'll see you in the next one.

Microsoft CEO’s Shocking Prediction: “Agents Will Replace ALL Software"

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