Agentic artificial intelligence (AI) marks a foundational shift in enterprise software, moving from generative tools to autonomous systems embedded within industry-specific workflows. This evolution enhances software value by automating repetitive tasks and augmenting human roles, creating new opportunities for vertical software vendors to capture enterprise value.
Generative AI tools, or “copilots,” assist humans but also require substantial manual input. Agentic AI introduces a new level of autonomy. For example, whereas a sales copilot might suggest an email draft, a sales agent can identify prospects, draft outreach, and execute tasks independently. This reduces administrative workloads and allows professionals to focus on high-value tasks.
This transformation is particularly impactful in labor-constrained industries like construction, insurance, and field services. These sectors face unique challenges, including aging workforces and a shortage of skilled labor. Here, agentic AI doesn’t replace jobs but instead enhances productivity by automating routine back-office tasks. For example, in construction, agents can streamline change order management, while in insurance, they can handle routine underwriting. These capabilities enable businesses to maintain operations despite labor shortages.
As industries face increasing labor constraints, productivity-enhancing software has become more critical than ever. Companies can no longer rely solely on hiring additional staff to address capacity issues, making automation an essential solution. This shift paves the way for software spending to replace traditional headcount costs, driving adoption across verticals.
Agentic AI also expands the Total Addressable Market (TAM) for software by boosting productivity and output. Industry estimates suggest it could more than double its market size, generating over $8 trillion in economic value across key industries. This expansion also signals a move from seat-based pricing to outcome-based models, where vendors charge based on the value delivered, such as faster completion or reduced processing time.
In addition to its economic potential, agentic AI offers vertical software vendors a distinct advantage through their access to industry-specific data. General AI models often lack the precision and contextual awareness required in regulated industries such as healthcare or legal services. Vertical platforms, by contrast, serve as systems of record, providing the proprietary data required to train agents that are accurate, compliant, and effective. This creates a virtuous cycle: the more agents are deployed, the more they learn, increasing both their value and the platform’s stickiness.
By turning software from passive systems of record into systems of action, agentic AI is addressing labor constraints and driving greater efficiency across industries. For investors, the key to capitalizing on this shift lies in identifying companies with deep domain expertise and access to proprietary data. As software evolves to deliver measurable outcomes, the agentic era is poised to reshape industries and create unprecedented economic prospects.
For more information on related investment opportunities and insights, read The Age of Embedded Intelligence: Vertical Software’s Foundational Role in an Agentic World, by William Blair technology analyst Dylan Becker.