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Generative AI is fundamentally transforming enterprise software, posing a significant challenge to traditional Software-as-a-Service (SaaS) models. AI agents are no longer just digital assistants; they are becoming core components of business applications, a shift that is particularly impacting midmarket companies. According to AlixPartners, midsize SaaS vendors are feeling the squeeze as they face growing competition from AI-native start-ups as well as tech giants like Microsoft, who are rapidly integrating advanced AI capabilities into their offerings.