Claude Cowork’s debut signals start of enterprise automation

The impact of Claude Cowork, an agentic artificial intelligence (AI) tool launched by Anthropic which can automate enterprise processes across functions, has triggered a debate about its possible fallout on the Indian IT and the software as a service (SaaS) industry.

Some executives and investors said that such tools are unlikely to have a huge impact on software businesses in the short-term, and that there is an opportunity to accelerate AI development. Others said that Indian IT companies have failed to innovate beyond the low-end outsourcing model and this will sound their death knell.

They cautioned that companies and startups need to innovate and keep up with the momentum to stay in business.


This follows global tech and software companies losing close to $300 billion in market value when Anthropic announced Claude Cowork, an agentic AI tool, over fear that it will replace the human workforce.

“What Anthropic is saying is that there is no need for expensive SaaS and cloud, you can replace it with cloud native software and Agentic AI. But that is not going to happen on its own, you need people to do it,” R Srikrishna, chief executive of Hexaware Technologies, told ET.

Samir Arora, founder of Helios Capital Management, wrote on the microblogging site X that "Indian IT companies cannot see beyond their nose--they only worry about next quarter's orders and guidance and if there is visibility for that they feel confident.”

Others said that IT companies have been conserving cash and giving back only through buybacks instead of making bold futuristic bets in IP creation, which could have made them futureproof.

The comments received a strong rebuttal from former Infosys CFO Mohandas Pai, who responded to the online debate and said there is a difference between service and product companies. “These are service cos like Accenture is--very successful. They will get AI for global enterprises soon,” he wrote on X, arguing that the local market for Indian product companies is still very small. "For product cos you need large local markets, huge capital, large economy... all of which India lacks even today."

Meanwhile, Sridhar Vembu, co-founder and chief scientist of SaaS firm Zoho, echoed the sentiment on the site, saying “an industry that spends vastly more on sales and marketing than on engineering and product development was always vulnerable”.

“Can Zoho survive the AI wave? It depends on our ability to adapt. I always ask our employees to calmly contemplate our death,” he said.

AI services play

Dev Khare, partner, Lightspeed India, told ET that in terms of IT services, what is different is that large enterprises around the world will require companies that can assure quality and maintain it over time. “That is a human service in a sense. They can use Claude, but at the end of the day, they want solutions delivered and want someone to do it for them. This is my view,” he said.

But at the same time the space will get more competitive and lower the margins, as automation takes over and will open up opportunities for startups to innovate, he said.

In need of reset

While industry watchers believe that any revenue impact is limited in the short term, the launch, coupled with enterprise software company Palantir’s AI offerings, serves as an inflexion point for software companies to rethink what their revenue streams will look like.

“In the short term, for traditional services, it will be a dampener. But there are new sources of revenue. The opportunity here for us is that there is more money on services, less on software licenses,” Hexaware's Srikrishna noted.

According to experts, the recent market sell-off was an overreaction and will stabilise soon. Investors pointed out that the AI-led services opportunities are huge.

Analysts at Motilal Oswal Financial Services estimate a 2% hit on revenue growth each year for the next 3-4 years but noted that the next 12 months will be crucial to monitor what AI-native partnerships will drive growth in the industry.

“We expect that this should lead to a pick-up in AI services deals in mid-2026 in the form of short-cycle deals,” analysts said in a note.

Imagine you are doing accounts reconciliation and need to get data from an Excel sheet, credit card and multiple enterprise resource planning systems. “Some part of this can be done by Claude Cowork. But the enterprise workflows are complex and only menial tasks can now be automated. You will still need people to understand the nuances,” pointed out Sravan Kumar Adithya, co-founder of Toystack AI, an enterprise workflow platform for AI agents.

Venk Krishnan, founder of NuWare and NuVentures, said low-end jobs such as manual testing, which is a huge area for IT companies, will be impacted and companies are already going slow on hiring as they experiment with AI. “But I don’t see a significant short term impact,” he said.

The potential impact of Anthropic’s Claude ‘coworker’ plugins will likely reset global tech and business services, beyond IT, impacting 10-15% of tech and support functions, as they compete with 6-8% of the IT workforce across sales, legal and marketing roles, said Gaurav Vasu, CEO and founder of UnearthInsight.

“Enterprises are ultimately going to build this software and they need someone to help them not only build it, but maintain, run and sustain it, and that's a very complex job,” said Ashutosh Sharma, vice president and research director at Forrester, adding that the customisation of such tools is where IT firms will have some runway to grow.