Will ai solve software and services firms’ unhappy partnership?

For decades, software companies and services firms have made poor partners. There are very few examples of software businesses that have thrived long term inside services firms or vice versa. The oft-cited exception is Trizetto within Cognizant, and even in that case, it is an open question whether the asset would have been more successful as an independent software company.

This tension is not accidental; it is structural in nature. Yet, as I have argued in a previous blog, the rise of generative AI and agentic systems is challenging some of the most basic assumptions that have kept these two business models apart. We are entering a period where the historical logic no longer fully applies, and that creates both opportunity and risk.