As AI makes it easy to generate 'good enough' software, a functional product is no longer a moat. The new advantage is creating an experience so delightful that users prefer it over a custom-built alternative. This makes design the primary driver of value, setting premium software apart from the infinitely generated.

When asked if AI commoditizes software, Bravo argues that durable moats aren't just code, which can be replicated. They are the deep understanding of customer processes and the ability to service them. This involves re-engineering organizations, not just deploying a product.

Despite offering modern browser interfaces, the company found that expert data entry clerks were significantly faster on old text-based "green screen" terminals. They could type without looking at the screen, using muscle memory for tabs and function keys, making the modern UI a downgrade in efficiency.

A logical data management layer acts as middleware, disintermediating business users from the underlying IT systems. This data abstraction allows business teams to access data and move quickly to meet market demands, while IT can modernize its infrastructure (e.g., migrating to the cloud) at its own pace without disrupting business consumption.

The long-held belief that a complex codebase provides a durable competitive advantage is becoming obsolete due to AI. As software becomes easier to replicate, defensibility shifts away from the technology itself and back toward classic business moats like network effects, brand reputation, and deep industry integration.

Contrary to fears of chaos, allowing users to modify their software can create more stability. Users can craft a predictable, long-lasting environment tailored to their needs. This control protects them from disruptive, top-down redesigns pushed by a distant corporate office.

For incumbent software companies, an existing customer base is a double-edged sword. While it provides a distribution channel for new AI products, it also acts as "cement shoes." The technical debt and feature obligations to thousands of pre-AI customers can consume all engineering resources, preventing them from competing effectively with nimble, AI-native startups.

Enterprises are trapped by decades of undocumented code. Rather than ripping and replacing, agentic AI can analyze and understand these complex systems. This enables redesign from the inside out and modernizes the core of the business, bridging the gap between business and IT.

Enterprises are finding immediate, high return on investment by using AI to port legacy codebases (like COBOL) to modern languages. This mundane task offers a 2x speed-up over traditional methods, unlocking significant infrastructure savings and even driving new developer hiring.