B2B software stocks have fallen roughly 30% so far in 2026. Investors are nervous. Boardroom conversations across Europe have shifted from growth narratives to existential ones: Will AI replace us? Are we defensible?
A certain amount of this worry is undoubtedly justified, but the reality is more nuanced. The dominant version of the AI conversation treats every software vendor as interchangeable, as if depth of domain knowledge doesn't matter once a sufficiently powerful model exists.
I am actively engaged in this topic, not just as a software CEO, but as someone who has spent years immersed in the world of digital asset management, working with some of the most demanding organizations in the world when it comes to governing critical content, managing complex media workflows, and operating in regulated, high-stakes environments.
This generic perspective does not fit with what I see every day, and many industry experts are beginning to agree.
The real divide isn't AI vs. non-AI
A recent PwC Strategy report, "AI Is Rewriting Software — Yet Markets Fail to Recognize Defensibility", draws a clear line between software that will be commoditized and software that is genuinely defensible. The companies most at risk are those built on simple, routine, click-heavy workflows, generic tools with no proprietary data and no vertical depth.
On the other side of that line, and this is where it gets interesting, sits a different kind of company. What makes B2B software truly defensible in the AI era. Among the key characteristics: "verticalized software with deep domain expertise." The report is explicit, deep domain expertise embeds software in hard-to-replicate industry-specific processes, edge cases, and terminology that generic AI simply cannot model reliably. Add to that deep embeddedness in mission-critical processes, proprietary data ownership, and operation in compliance-heavy regulated workflows, and you have a business that AI enhances rather than replaces.
Depth as a competitive advantage
At Fotoware, we have spent decades building software that sits at the center of mission-critical workflows, rights management, compliance-heavy media operations, complex metadata structures, deep integrations into the tech stacks of media houses, government agencies, cultural institutions and large enterprises. We don't just store digital assets. We are woven into the operational fabric of how our customers work.
That embeddedness creates structural switching costs, proprietary data, and institutional knowledge that generic AI cannot replicate. Our own internal analysis confirms it: AI will expand the value we deliver, not undermine it. The workflow automation we enable has always been central to our platform, and as AI capabilities extend further into unstructured data, the value of having a structured, trusted, deeply integrated system of record only grows.
In November 2025, Gartner named Fotoware a Niche Player in the Magic Quadrant for Digital Asset Management Platforms.
Read more: Fotoware continues to be recognized in the Gartner® Magic Quadrant™
In a market that celebrates "Leaders" and "Visionaries," the word niche can sound modest. But read what Gartner actually says: Niche Players "perform well in specific business models, industry verticals or geographies" and are particularly suited for organizations that "want a close relationship with a provider, or seek a platform that addresses specific industry use cases and functional requirements." That's not a consolation prize. That's a description of exactly what our customers are looking for, and what makes us so hard to replace.
Gartner recognized three distinct strengths of Fotoware: our workflow automation and efficiency, our vertical-specific portfolio spanning manufacturing, museums, law enforcement and defense, and media and entertainment — and our customer experience, reflected in one of the highest retention rates in the market. The Critical Capabilities report adds further context, positioning Fotoware as an "operational DAM" built around control, structured collaboration, and compliance. Our highest-scoring use case? Regulated industry compliance. Not by accident. By design.
What customers actually want from a software vendor
When workflows are business-critical, when compliance is non-negotiable, when the cost of getting it wrong is real, organizations don't want to bet on an AI-native tool built in two years by people who have never navigated the complexity of a large media archive, a law enforcement evidence chain, or a broadcaster's rights management challenge. They want a vendor who knows their world from the inside out. A close partner. A specialist.
That is precisely what a specialized, niche software vendor like Fotoware offers. And in the AI era, I believe that's exactly what the market will increasingly reward.
The market hasn't fully caught up — but it will
Right now, even the most AI-defensible software companies are being penalized by the market to the same extent as those that genuinely should be worried. The market is not yet discriminating.
But it will. Investors are already asking sharper questions. One Nordic investment banker noted in the PwC report: "AI defensibility is now top of the agenda for our investment committee".
As another Nordic software investor put it in the same report: "We do not view AI as a direct competitor to mission-critical software. On the contrary, AI will be used to automate new tasks and increase the value of the software for customers."
For software companies with real depth — vertical expertise, proprietary data, mission-critical embeddedness, compliance-grade workflows —AI is an opportunity to demonstrate exactly why the years of hard-won domain knowledge were worth building.
At Fotoware, that's the conversation we’re having. And we are ready for the future.
