The rise of agentic AI has triggered a crises in the enterprise software industry. The fear goes something like this: if artificial intelligence (AI) makes every worker more productive, companies will need fewer employees. Fewer employees means fewer software licenses, which in turn means the business model that has made enterprise software one of the most profitable sectors in technology begins to crack. Recently, Microsoft VP Rajesh Jha provided a business idea, which company CEO Satya Nadella seems to have agreed upon.
Microsoft Foundry : Every Agent gets its own computer
This week, Microsoft offered what may be its most concrete answer yet to that fear. Microsoft announced an update to its Foundry platform, which is the infrastructure layer that allows businesses to build and deploy AI agents. The new feature, called Hosted Agents in Foundry Agent Service, is now available in public preview. The announcement came with a striking line by Nadella: “Every agent will need its own computer.“Microsoft is now offering each AI agent its own dedicated, enterprise-grade sandbox in the cloud – a private, secure computing environment with its own storage, its own identity, and its own set of permissions. In plain terms, think of it as giving every AI assistant its own locked office in a high-security building, with its own keycard and its own filing cabinet.“Every agent will need its own computer. And with new Hosted agents in Foundry, every agent gets its own dedicated enterprise-grade sandbox, with durable state, built-in identity and governance, and support for any harness or framework,” Nadella said in a post on X, while announcing Microsoft Foundry update.
Rajesh Jha’s argument: Fewer humans, but more seats
Rajesh Jha, Microsoft’s Executive Vice President of Experiences and Devices, has been making an argument that directly addresses the fear driving anxiety across the software sector. Earlier this month, he said that if AI agents are going to operate inside enterprise software systems, they will need their own logins, their own inboxes, and their own digital identities. In other words, they will function as users. And if they function as users, they may need to be licensed as users.“All of those embodied agents are seat opportunities,” Jha said, using the industry term for paid software licenses.Jha explained that if the company has 50 human employees, they pay for 50 employees. Now with AI agents, even if a company fires 40 human staff, and deploys 40 AI agents, this means that they still have pay for 50 total licenses – 10 humans and 40 AI agents. Consequently, a business that reduces its headcount to save money may actually end up spending more on software to “seat” the digital agents replacing them.
