B2B Software is Dead in Era of AI w/o World-class Design
“The next billion-dollar B2B company won’t win on features - it will win on feelings."
⚡ AI Shift Has Broken the Traditional B2B Playbook
For years, the winning formula in B2B SaaS was predictable:
Build robust tech. Distribute through sales. Add design at the end…maybe.
That model was bad. But we see with products like Microsoft Teams and CRMs like Salesforce, a poorly designed product with lots of features, coupled with a strong sales organization and pricing power, has worked.
In the era of AI, the borrowed time these companies were living on is running out.
Thanks to AI, technology is no longer a moat. LLMs can write production-ready code, and no-code tools can build functional apps in a weekend. Agents and copilots are automating entire workflows.
The barrier to shipping features has collapsed. Every product works. The question is no longer, “Can it be built?”. The question of the day is, “How does it feel to use?”.
In this competitive landscape, design is strategy. And by design, I don’t mean just how software looks. Design is how the product behaves. How it reduces friction. How it drives emotion and loyalty. How your product makes the user feel.
In a world of software abundance, experience is the only scarcity left.
The Great Commoditization
The engineering-led moat is gone.
AI and no-code platforms have turned yesterday’s core capabilities into building blocks anyone can use. CRUD apps, workflows, permission models - all replicable by a solo founder with ChatGPT and Retool.
This means features are no longer differentiators. You can’t be selling a spreadsheet of check boxes. UX is the new battlefield as employers search for increased productivity through collaboration and innovation. It is design that makes software sticky. Great design gives a product life. Users come to love using it, integrating it into their daily rhythms and routines. It can even become part of their work identity and the reason for them to join (or leave) an organization. We saw that with Slack and the developer community.
Legacy enterprise products built around complexity and consulting are deeply vulnerable here. And they should know it.
The winners in this new environment will be products that feel effortless. Products that users want to adopt. Products that are designed, not just built.
Slack: Design as a Wedge
Slack didn’t invent chat. It reinvented how chat felt. A tremendous amount of investment was put into the back-end to ensure that it is fast and responsive. Just as much energy was invested in the experience. To make the experience “human”.
A tremendous amount of thought (and debate!) was put into defaults and workflows. Interactions were designed, reviewed, and then designed again.
That experience-first approach created pull. Users adopted it without permission. It spread because it was enjoyable. Users fell in love with the product and it quickly replaced tools that were "functional" but painful.
And that’s the pattern we see with Figma, Notion, Linear, and Airtable.
These products win not because of more features, but because of reduced complexity. A better onboarding experience. A deeper emotional engagement and sense of accomplishment as the user feels themselves become more productive and effective at what they do.
These products feel better - and that’s the moat.
Why Design Wins in B2B
🧠 1. Reduced Cognitive Load
Great design removes friction and decision fatigue. This is the primary reason why we beat Google and Gmail with Outlook mobile in the enterprise. We focused on the reducing cognitive load for central tasks to differentiate (and leant into PLG hard for distribution).
More recent examples of reducing cognitive load:
Airtable makes relational databases feel like spreadsheets
Notion blurs docs, tasks, and wikis into a seamless flow
Linear turns issue tracking into something... enjoyable?
These tools work with the user’s brain, not against it.
⚡ 2. Faster User Adoption
Modern tools can’t afford friction. Everything needs to be intuitive with a heavy bias to what I call Successive Revelation. Don’t throw everything at the user right off the bat and expect them to hunt and peck their way through menus to learn your product.
Design-led products onboard without calls or FAQs. (When was the last time you read a how-to guide for Slack? When was the last time you did that with Excel or Salesforce?)
These products spread within teams and organizations without any formal training. It happens organically as part of natural human workflows.
And because of all of this, beautifully designed products win users before procurement and IT ever sees them.
Hearts and minds have already been won.
❤️ 3. Higher Retention
Users stick with products that make them feel empowered and productive. Slack was a perfect example of that. Not only did users feel empowered, but they felt connected to the rest of their team, regardless of where they were physically. When was the last time email did that? Even if emailing someone on the other side of the office, the products make you feel far apart. Distant and remote.
Excellent and thoughtful design brings people together and builds habit loops that feel natural.
That same attention to detail reduces the cost and burden of support. Not only is the product intuitive to use, but advocates and champions are created. Folks who love to help their teammates get the most out of the new product.
Retention becomes emotional. It’s not just technical and growth hacks.
🔁 4. Viral Growth Through Delight
Design is a growth engine. Through thoughtful design practices, understand the whole human within their context - team and goals f- and then deliver solutions that joyfully take the user to that goal with human connection.
Figma made real-time collaboration feel native
Loom turned async video into a default mode
Miro felt like a whiteboard, but better
Human connection is the ultimate growth flywheel. That’s how bottoms-up adoption works.
💰 5. Premium Positioning
Design-led products command higher prices - and justify them. Every design-led product on the market has greater brand value and is able to command higher prices. That is now axiomatic with some key pragmatic and measurable reasons.
Review your customer journey and measure the time-to-productivity. This will resonate with buyers and users alike.
Admins value reduced overhead as their budgets are reduced year-on-year. The fewer calls they have to take from confused execs, the better. That extra polish and attention to detail has practical value IT deeply appreciates.
Finally, IT is no longer the “bad guy” when it comes to tools. Yes, they are looking for productivity gains. They are also looking to increase retention and engagement in the workplace. Employees value tools they actually like, and that will reflect back to the IT department that is deploying them.
Design becomes your pricing power - not just your polish.
The AI Imperative: Why This Shift Matters Now
The rise of AI has permanently altered the competitive dynamics of B2B software. Tasks that once required months of engineering effort - building CRUD (Create, Read, Update, and Delete) interfaces, stitching together integrations, shipping MVPs (Minimum Viable Products) - can now be completed in hours with AI-assisted development.
AI now commoditizes backend logic, standard workflows, integrations, and automations.
What AI can’t replicate (yet) is taste. The process of getting the user into a “flow state” and keeping them there. Happily productive.
It is hard and time-consuming to step outside of the product, consider the context of the user, and make design decisions in a human-centered way.
That’s the layer where design lives. And I would argue that it’s now the last durable differentiator a company will have.
The next breakout B2B product will be chosen because it feels right - not just because it works.
If you’re still competing on features, you’re in a race to the bottom. If you’re building a differentiated experience, you’re in your own category. And that is market power.
Who’s Most Vulnerable in B2B (and Why)
Not every B2B company is equally exposed in the AI era.
Some have built resilient businesses around scale, ecosystem, or data gravity. But others - especially those whose products haven’t evolved with user expectations - are on a collision course with fast-moving, design-led challengers.
1. Feature Bloat as a Strategy
🛑 Vulnerable: Salesforce, SAP, Oracle
These giants win RFPs by checking every box - but at what cost to usability?
Their products are often bloated with underused features. They’re dependent on consultants to implement and maintain. And let’s face it, they are painful for everyday users.
⚠️ Risk: AI startups are now replicating the outcomes of these tools without the overhead, using better UX and faster onboarding.
2. Integration Moats That Are Eroding
🛑 Vulnerable: Workato, Boomi, MuleSoft
These companies built moats on proprietary integration layers and connectors.
But AI agents are catching up. They can quickly automate cross-tool workflows; Translate APIs on the fly; and easily replace business logic with natural language.
⚠️ Risk: The integration moat is dissolving - and with it, the justification for heavyweight platforms that are hard to set up and costly to maintain.
3. Switching Costs as a Defense Mechanism
🛑 Vulnerable: Coupa, SAP Ariba, NetSuite
These tools rely on data lock-in and painful migration processes to retain customers, not product love.
But AI makes it easy to extract data and transform it. LLMs can autogenerate replacement tools from CSVs and workflows so startups can quickly build and iterate on drop-in replacements.
⚠️ Risk: Switching costs are no longer enough to stop churn when better-designed tools exist.
4. Top-Down, Sales-Driven Adoption
🛑 Vulnerable: ServiceNow, SharePoint, Confluence (Atlassian)
These products survive on procurement-led rollouts, not user-led pull. All of these products require formal training. They suffer from poor UI/UX that makes them hard to use. The cognitive load put on the user every time they engage with the product instills a reluctance to use it. This is the opposite of the emotional buy-in we want from the end user.
⚠️ Risk: Tools like Notion, ClickUp, and Coda are winning bottom-up, with user delight as the wedge.
5. Outdated UX Mental Models
🛑 Vulnerable: Jira (Atlassian), Workday, Tableau
These products have evolved over years, with each additional feature jammed into nested menus and dense dashboards that few people get value out of.
They feel like enterprise tools from 2010. A thin user interface to a database that requires formal onboarding.
If your product is so complex that a user can gain a certification in its use, you’re doing something wrong.
⚠️ Risk: Teams are defecting to design-first challengers (e.g., Linear, Rippling, Hex) that offer clarity, simplicity, and modern flows.
If your product was built to win RFPs, but not the hearts and minds of users, you’re vulnerable.
It’s important to note. The rise of AI doesn’t just flatten tech and just make it easier to develop. AI sharpens user expectations. And if you're not building around experience, you're not building for tomorrow.
Case Studies: Two Giants Under Pressure
To understand just how disruptive this design-first, AI-powered shift is, look at the most dominant names in B2B software: Salesforce and Microsoft. Both companies are massively entrenched, with strong moats built on ecosystem depth, enterprise distribution, and bundling power. But their user experiences often lag behind modern expectations.
And as AI flattens technical differentiation and switching costs, that UX debt becomes a strategic liability. Below, we break down why these incumbents are vulnerable — and where fast-moving challengers are starting to gain ground.
⚠️ Salesforce: Vulnerable by Complexity
Why they’re vulnerable:
Feature sprawl: Salesforce is a maze of menus, settings, and fields. What started as a CRM is now a sprawling ecosystem of tools (Sales Cloud, Marketing Cloud, Tableau, Slack, etc.) that lack UX cohesion.
Implementation drag: Most customers need certified consultants or internal admins just to get value from the product. AI and no-code tools now threaten to replace that with lightweight, guided setups.
End-user frustration: While Salesforce is a powerhouse for ops and leadership dashboards, the people who use it daily — sales reps — often hate it. It’s seen as a data entry system, not a productivity tool.
AI threat vector: As AI enables automatic lead enrichment, forecasting, and follow-ups, startups like Clari, Apollo.io, and Attio are building CRM-lite tools that do less, better — without needing Salesforce’s bulk.
Where they’re still strong:
Deep ecosystem integrations
Entrenched in enterprise procurement workflows
Verticalized solutions (e.g., Financial Services Cloud, Health Cloud)
But these strengths are now maintenance mode advantages, not growth ones.
⚠️ Microsoft: Vulnerable by UX Legacy
Aside: Outlook mobile (where I led product for a while) brought together the Acompli and Sunrise DNA and Microsoft as a whole took a leap forward in design thinking. We can still see some of the DNA in Microsoft Loop. However, we can see through the Teams experience that old habits die hard.
Why they’re vulnerable:
Legacy interfaces: Many Microsoft products (especially in the enterprise suite) still carry the weight of 20+ years of UX patterns. SharePoint, Teams, Outlook, and Dynamics can feel disjointed and unintuitive - especially to younger teams used to sleek, consumer-grade tools.
User friction: Tools like Teams and Outlook are widely deployed but rarely loved. UX inconsistencies, latency, and configuration complexity all open doors for better-designed alternatives like Slack, Superhuman, or Zoom.
Over-reliance on bundling: Microsoft wins many deals because of pricing leverage via Microsoft 365 bundling - not because the product is best-in-class.
AI integration risk: Copilot is impressive, but also risks further complicating already complex tools. If the AI layer adds more interface friction instead of reducing it, users will bail. We’re already seeing a lot of pushback on this front.
Where they’re still strong:
Incredible distribution through M365
Security and compliance advantages
Enterprise procurement dominance
Rapid AI investment with Azure + OpenAI partnership
Still, Microsoft is essentially a portfolio of products with wildly inconsistent UX. This is a liability in a world where users increasingly choose tools based on experience, not just integration.
Both companies are still dominant - but their UX vulnerabilities are now growth bottlenecks, not minor annoyances.
And in a world where AI collapses functional differentiation, experience becomes the whole product.
How to Compete With Design at the Center
This isn’t about shipping prettier UIs. It’s about re-orienting the business around experience.
✅ 1. Build Design-First Teams
Post-Outlook and Slack, at every company I played a role at, this was the hardest shift to make. Orient your product development process to involve design from the start.
PMs need to think in terms of flows and not feature lists. Step back from the screen and understand the context of the user. What is their journey and what is the journey of their company. Where does your product fit in that journey?
Engineers need to understand that UX debt as real debt. It could be the most important debt for the longevity of the business. This is often the hardest concept to convince engineers. For them to make a change to a product that ultimate will “do the same thing”.
🛠️ 2. Invest in Design Infrastructure
Investment time and resources into the tooling of the design team. This will pay dividends going forward. If you do everything else right, design will become your bottleneck to velocity. Design infrastructure introduces design scale.
Create and maintain a design system. This sounds basic, but so few companies do this. It is treated as a nice-to-have or something that is built over time on the side. This is a strategic mistake that will cost you in velocity moving forward.
Prioritize consistency and accessibility. I continue to hear from companies complaining that they have to invest in accessibility. Not only is that questionable from an ethical perspective, its short-sighted (excuse the pun) strategically.
In the Outlook Mobile team, we were initially forced to learn about accessibility. As an engineering heavy team, it was hard for folks to invest in changes that would result in a product that would essentially “do the same thing” (see above).
However, through a deeply experiential approach to get the whole team to understand what using a product is like to use when you’re short-sighted or colorblind increased our collective empathy. This resulted in us building a much better product for those without accessibility challenges.
Last, but not least, you must budget for design research and iteration. It takes time for us to step out of our own world and get to understand that of people who are completely different to ourselves.
Different cultures, different languages, different challenges and constraints. It takes investment to gather and embody this learning. But it will pay dividends going forward.
📊 3. Measure What Matters
Move past NPS. CEOs pay way too much attention to this metric. Yes, it’s a useful tool to get a baseline. But it is incredibly laggy, rarely actionable, and takes a long time to move. There is a better way.
Instrument your product and within the user journey(s), calculate the time to first value. How long does it take for a new user to get value out of your product? What is the action that signifies that achievement?
Map key workflows and measure the percentage of them that are completed. For those that don’t complete, ask yourself and users - “Why did the user start that workflow?”, and then “why did they abandon?”. There is no point making it easier for a user to accomplish a goal they didn’t actually have.
Measure the rate of issues coming into customer support. Their severity and the time it takes to address the issues.
Before we had any instrumentation within Outlook Mobile, we measured the number of 1-star reviews we were getting on the app stores (a lot!!). We categorized them (manually!!) and then addressed the top ranking ones in every week-long sprint. This is what got us from a 2.2 star app to a 4.7 star app and winning the Verge’s best email product on the market in 2017.
🧭 4. Elevate Design Org-Wide
Design isn’t a service function waiting for instructions to be cascaded down via PMs. It needs a seat at the strategy table. Not only do we get incredible user-centric insights into discussions, but we get visualizations of the company and product vision that motivate and inspire. More importantly, we elevate design as a core company value and cultural touchstone. Everyone becomes a product person.
In practical terms, design should have a strong influence on roadmaps. And not just polish them and help with decks and mockups.
Inform and educate executives across the organization how design drives conversion, retention, and expansion. These conversations bring the subjective down to the objective and practical.
Lastly, work with your marketing team to help sales enablement prepare the sales organization to sell the experience. Not just the features. Move away from check-box comparison tables to deeper value and strategic problem solving.
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nice read!