The chain reorganizes into five tiers, from highest value capture to lowest.
Tier 1: System of Action — Agent Orchestration (Highest Value)
The orchestration layer that understands intent, coordinates agents across systems, and executes outcomes directly. This is the new commanding height of enterprise technology.
OpenAI Frontier’s architecture reveals the aspiration: Business Context (semantic layer), Agent Execution (plan, act, recover), and Evaluation & Optimization (feedback loops). It works with agents from any vendor. It’s not an application — it’s the platform that orchestrates all applications.
The value capture mechanism is an “orchestration tax” — analogous to the App Store’s 30% cut. Whoever operates the platform through which agents plan, execute, and report captures a percentage of every action.
Players racing for this:OpenAI Frontier, Anthropic Claude Cowork, Microsoft Copilot Studio, Salesforce Agentforce, Google Gemini Enterprise.
Tier 2: System of Intelligence — Evaluation, Optimization, Memory
The feedback loops that make agents improve over time. Whoever owns the definition of “what good looks like” controls quality, and therefore controls trust.
Every evaluation, every optimization, every memory trace makes the system more effective. Think of a new employee vs. a ten-year veteran — the veteran’s value isn’t just knowledge, it’s judgment built from thousands of feedback cycles. High switching costs by design.
Tier 3: Agent Identity & Governance — The Sleeper Moat
Each agent needs an identity with explicit permissions, audit trails, and compliance boundaries. This sounds like infrastructure plumbing. It’s actually a strategic chokepoint.
The historical parallel is Active Directory. Microsoft didn’t win the enterprise PC market by making the best word processor. It won by controlling identity and permissions. Agent IAM follows the same logic. In regulated industries, this becomes the stickiest layer.
Tier 4: Dynamic Context Store — The Mutated System of Record
The system of record doesn’t vanish. It mutates. Static schemas become living context graphs for agent consumption. Records become traces of agent actions, not inputs for human navigation. Essential infrastructure, but margin compresses as the semantic layer above becomes the value capture point.
Tier 5: Traditional SaaS Applications — The Hollowed Middle
UI-dependent, seat-based, workflow-centric applications sit at the most vulnerable position. If your differentiation is navigation and dashboards rather than proprietary data, you’re in the squeeze zone.
Four possible fates: become a data API (lower margin), go agent-native (rebuild), become the orchestration layer (ambitious pivot), or decline.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
