A comprehensive new report from RBC Capital Markets reveals that the artificial intelligence revolution is fundamentally reshaping the software and SaaS landscape, with innovation—not incumbency—determining which companies will survive the AI transformation. The analysis warns that established market position alone won’t guarantee success, drawing parallels to how Sears, Blockbuster, and Barnes & Noble failed to capitalize on the internet era despite their dominant positions.
The Winners: Microsoft leads RBC’s bullish list, with analysts noting that Wall Street continues to underestimate the tech giant’s comprehensive AI strategy. The company’s AI initiatives now span its entire portfolio, including Azure cloud services, Office productivity suite, Teams collaboration platform, Dynamics business applications, and LinkedIn professional network. Microsoft’s strategic partnership with OpenAI, combined with its diversified in-house AI development, positions it for accelerated growth.
Intuit earned recognition for its early AI investments that predated the ChatGPT phenomenon. The tax and accounting software leader has deployed new AI agents across QuickBooks and TurboTax, positioning itself to capture market share in industries primed for automation. HubSpot, the CRM challenger, impressed analysts with its ChatSpot, Breeze, and Breeze Intelligence offerings, all tightly integrated with generative AI capabilities. Its innovation culture and unified technology stack could help it gain ground against larger competitors.
On the infrastructure front, MongoDB was identified as a critical building block for AI applications, particularly those handling unstructured data, with several AI-native startups already relying on its platform. Pegasystems stands to benefit from AI agents that increase enterprise system complexity, with its Blueprint workflow builder enabling companies to modernize processes using natural language.
The Losers: Not all incumbents are keeping pace. Salesforce’s heavily promoted Agentforce remains largely confined to pilot projects, with RBC expressing concerns that it delivers more basic automation than true “agentic AI,” potentially undermining its long-term competitiveness. ZoomInfo faces what RBC describes as an existential threat, as large language models risk commoditizing its core product—contact information sales. The analysts compared ZoomInfo’s AI pivot to the Yellow Pages’ unsuccessful attempt to compete with Google, casting serious doubt on its viability.
Key Quotes
Incumbency is not enough for software companies to thrive in a post-AI world — innovation is paramount
RBC Capital Markets analysts emphasized this key finding in their report, establishing the central thesis that market position alone won’t protect software companies from AI disruption.
If incumbency were the most important factor, Sears, Blockbuster, and Barnes and Noble would have been major beneficiaries of the Internet, but instead new companies came in their place
The RBC analysts used this historical comparison to illustrate how technological revolutions can upend established market leaders who fail to innovate, drawing a direct parallel to the current AI transformation in software.
Our Take
This RBC report cuts through the AI hype to identify genuine competitive differentiation in the software sector. What’s particularly striking is the stark contrast between companies with comprehensive AI strategies versus those with superficial implementations. Microsoft’s success stems from embedding AI across its entire ecosystem rather than treating it as a standalone feature, while Salesforce’s struggles with Agentforce suggest that marketing alone can’t substitute for deep technical integration.
The ZoomInfo case is especially instructive—it demonstrates how AI can commoditize entire business models built on information aggregation. As LLMs become more capable, any company whose value proposition centers on collecting and organizing publicly available data faces existential risk. Meanwhile, companies like MongoDB that provide infrastructure for AI applications are positioned as “picks and shovels” plays in the AI gold rush. The report underscores that the AI transformation is already separating winners from losers, and the window for meaningful innovation may be closing faster than many incumbents realize.
Why This Matters
This RBC Capital Markets analysis matters because it provides a reality check for the software industry as AI fundamentally transforms competitive dynamics. The report’s central thesis—that innovation trumps incumbency—challenges the assumption that established players will automatically dominate the AI era simply because of their existing market positions and customer bases.
The implications are profound for investors, employees, and business leaders across the technology sector. Companies that fail to genuinely integrate AI capabilities risk following the path of pre-internet era giants like Blockbuster and Sears, regardless of their current market dominance. This creates both significant opportunities and existential risks depending on each company’s AI strategy execution.
For the broader business landscape, the report signals that AI agents and generative AI are moving beyond hype into practical differentiation. Companies like Intuit and HubSpot demonstrate that early, sustained AI investment can create competitive advantages, while laggards like ZoomInfo face potential obsolescence as AI commoditizes their core offerings. This analysis serves as a crucial roadmap for understanding which software investments and partnerships will likely succeed in the AI-driven future.
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Source: https://www.businessinsider.com/winners-losers-ai-software-shakeout-2025-8