Software used to be sold by the seat, then by the effort. Soon it's sold by the result, and that puts jobs in direct competition with AI.
The way software is sold is changing, and it's going to have a direct impact on the labor market. Software used to be sold by the seat. Then it was sold by the effort. Soon it's going to be sold by the result. That puts people and their jobs in direct competition with AI, and it's going to bring a lot of clarity.
There are three ways software is typically sold to a business. Price per head: you pay for each person who uses it. Paying for compute: tokens, cycles or calls, based on the effort the software puts in to reach a result. And the third, still developing: paying per result. You pay when the outcome is achieved. We're seeing this in customer service, where companies offer customer service as a service for as little as $1 per call closed.
Once software is billed per result, it's priced like a contractor, and it gets compared to what a person costs for the same result. Every support manager is running that comparison right now. About a dollar against over $8.
What does that mean? Companies will be able to take portions of their labor pool and convert them into vendors in their software stack. They're not buying the software. They're paying for someone to use or organize the software on their behalf to achieve a specific result.
Think of all the places you now see AI in your life. I went to a drive-through the other day and ordered from an AI agent. Not someone in the restaurant. Not someone in a call center in another country. A computer took my drink order. And it got it right this time.
These impacts will likely come faster, and first, overseas, where a lot of lower-cost customer support can be replaced with AI sooner.
How will companies react? Will they onshore more of their labor, or push more of it to AI? We'll have to see. It will change business by business, depending on the customer experience each one wants to deliver.