The $58 Billion Productivity Software Shake-Up: AI Copilots Challenge Microsoft and Google for the First Time in 35 Years

Gartner predicts that through 2027, GenAI and AI agent use will create the first true challenge to mainstream productivity tools in 35 years, prompting a $58 billion market shake-up.

The $58 Billion Productivity Shake-Up

The Interface Revolution:

We’re seeing the shift from menu-driven systems to free-form conversational agents. Users can articulate needs in natural language rather than navigating predefined paths.

The future of work won’t be typed — it will be prompted.

Current Leaders:

  • Microsoft 365 Copilot: 400K+ enterprise customers, $30/user/month
  • Google Workspace + Gemini: 3B+ users, $20/user/month

The Challengers:

New vendors will emerge, new formats will take hold, and value will shift to agentive experiences. AI agents become the “digital front doors” for enterprises — just as websites became essential in the 1990s.

This fundamentally challenges incumbents like Microsoft Office and Google Workspace.


This is part of a comprehensive analysis of 20+ AI business trends for 2026. Read the full analysis on The Business Engineer.

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