Microsoft is preparing for a shift in enterprise software economics where AI agents, rather than human employees, become the primary users of business applications. Executive Rajesh Jha recently proposed that as companies deploy fleets of autonomous agents, these digital workers will need their own verified identities, email inboxes, and individual software seats.
This approach challenges the growing fear among investors that artificial intelligence will erode the traditional seat-based pricing model. Many analysts worry that as one human becomes capable of managing dozens of tasks, companies will drastically reduce their software license counts, gutting the revenue streams for major vendors like Microsoft, Salesforce, and Workday.
The case for machine-based licensing
Jha argues that the rise of agents actually creates a massive expansion opportunity for software providers. He envisions a future where organizations employ more agents than humans. In this scenario, a company currently paying for 20 human licenses might eventually pay for 50 licenses if those humans oversee dozens of autonomous agents, each requiring access to enterprise platforms.
"All of those embodied agents are seat opportunities," Jha said at a recent conference. He suggests that if agents act as independent users, they must be licensed accordingly.
However, industry experts are split on whether this strategy will succeed. Nenad Milicevic, a partner at the consulting firm AlixPartners, warns that this vision ignores the potential for customer backlash. He believes AI will inevitably reduce the number of humans interacting with software, leading to significant pressure on vendors to lower costs rather than increase them.
Milicevic argues that companies will resist paying for machine-based access if they view agents as mere extensions of human employees. He predicts that the software market will shift toward open platforms that allow agents to operate freely. Vendors that attempt to impose aggressive licensing fees on bots may find themselves losing market share to rivals with more flexible, customer-friendly policies.
The tension between these two perspectives defines the current debate over software valuations. While Microsoft views agents as a new category of billable user, the market must decide if a machine performing a task is truly equivalent to a human employee. The outcome will determine the financial structure of the enterprise software industry for the next decade.
