Transcription
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. 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 SaaS, which also means likely far fewer developers.
So let's watch the video, and I'm going to break it down for you. This is on the BG Squared podcast. I'll drop a link to the full interview down below. SaaS 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 crowd 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 SaaS, and that means software as a service, is essentially just a thin UI layer on top of a database.
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. 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 SaaS 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.
I've been in SaaS my entire career. I have built multiple SaaS companies. I've worked for SaaS companies, and if I'm being transparent, I probably wouldn't start another SaaS company right now. I probably wouldn't invest in any SaaS 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 what the backend is. They're going to update multiple databases, and all the logic will be in 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 hardcoded 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.
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. I want to thank the sponsor of this video, Chatbase. Chatbase is the ultimate platform for creating and managing intelligent AI agents for your business.
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So check out Chatbase today. Thank you again to Chatbase for sponsoring this video, and now back to the video. Once the AI tier becomes the place where all the logic is, then people start replacing the back ends, right?
In fact, it's interesting, as we speak, I think we are seeing pretty high rates of wins on Dynamics backends, and the agent use. 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, by the way, the other fascinating thing that's increasing is just not CRM but even our what we call finance and operations, because people want more AI-native Biz apps.
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. It's going to be interesting how companies choose the database that they decide to use. That means 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? Interestingly enough, one of the most exciting things for me is Excel with Python is like GitHub with Copilot, 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? You should just bring up Excel, bring up Copilot, and start playing with it because it's no longer like, oh, you know, it is like having a data analyst.
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 GitHub Copilot workspace creates the plan and then it executes the plan. This is like a data analyst who is using Excel as a sort of R column visualization to do analysis.
Scratch back, so he is saying why do you even need Excel? He probably has thought a lot about this because really, what is Excel? It is a thin UI layer on top of a database. 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?
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 tools. The Copilot is using Excel as a tool with all of its action space because it can generate, and it has a Python interpreter. That is, in fact, and by the way, when he says Python interpreter, that just means the ability to execute Python code.
A great way to reconceptualize Excel, and at some point, you could say, hey, I'll generate all of Excel. That is also true. After all, there's a code interpreter, right? Therefore, you can generate anything.
And so yes, I think there will be disruption. But the way we are approaching at least our M365 stuff is one, build Copilot as that organizing layer UI for AI. Get all agents, including our own agents. You can say 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. 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 SaaS for so long, it is so fascinating to watch.
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. It's clear that SaaS from Microsoft is thinking well ahead. He is already very invested in 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.
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 on top of it. 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.