Charles Lamanna, the Microsoft executive who oversees Microsoft 365 and the platform behind Copilot, says most business software will end up running behind AI agents rather than in front of users. That’s bad news for a lot of apps.
“If my agent interacts with your app exclusively, the agent’s your customer, not the end user,” Lamanna said Wednesday morning, speaking with Madrona’s Matt McIlwain in the opening keynote at the venture capital firm’s annual IA40 Summit in Seattle. “And agents are very harsh customers.”
Agents will pick whatever service is cheapest, fastest and most reliable, he said, and they’ll move people to another one quickly. Apps that sit behind agents will have a hard time holding on to pricing power or customer loyalty.
Lamanna splits software into two groups.
- “Thick” apps are where people spend most of their workweek, such as CAD programs, contact-center software, or Excel for a full-time financial modeler.
- “Thin” apps are the ones people drop into and leave. He said that describes the vast majority of business software, and those apps will end up running “headless,” with AI assistants such as Copilot and ChatGPT doing the work through the back end.
Microsoft’s own apps aren’t exempt
Microsoft’s own apps aren’t exempt. Word, Excel and PowerPoint won’t go away, Lamanna said, but most people will use them inside Copilot, which can now run Office without switching apps. In his view, the standard setup for an office worker ends up as Copilot for AI and Teams for communication, “and that’s maybe it.”
He compared a headless app to a company that sells only on Amazon. It can be a business, he said, but prices get squeezed when buyers are simply choosing between “your pencils or those pencils.” A brand such as Nike has more leverage.
Amazon itself is resisting that role. Earlier this week it blocked Meta’s Muse agent from shopping on its site, saying Meta never asked permission and that the agent doesn’t identify itself and appears to store customer credentials. Meta has said Muse can’t see users’ passwords or payment methods. Amazon is also in a legal fight with Perplexity over that company’s Comet shopping agent.
Amazon is open to agents on its own
Amazon is open to agents on its own terms. Days after blocking Muse, it opened its seller tools to Anthropic’s Claude, letting merchants manage inventory, prices and listings without going into Seller Central.
Lamanna brought up Muse himself onstage, predicting it will reach far more people than work-focused agent tools such as Copilot and Claude Cowork.
Microsoft is on the other side of the same question. Copilot depends on other companies’ software being willing to work behind it. In an August profile, Lamanna said Copilot uses connectors to pull data from services such as Salesforce and ServiceNow, so people don’t have to leave the app.
