Analyst(s): Mitch Ashley
Publication Date: May 8, 2025
Early leaders in artificial intelligence (AI)-native development are already establishing market momentum during the narrow window for technology vendors to differentiate, deliver value, and position themselves at the forefront of this seismic shift to using AI across the software development lifecycle.
Key Points:
- The three AI-powered software development models: AI-Augmented, AI-Driven, and AI-Native.
- The fundamental job of the developer will shift from code-centric to becoming an AI-savvy architect, orchestrator, and communicator.
- Significant opportunities for vendors across the software development lifecycle to establish their position in AI-driven and AI-native development.
Overview:
AI is fundamentally reshaping the software development lifecycle (SDLC), accelerating innovation and redefining the roles of developers, tools, and platforms. As AI-native and AI-directed development approaches take hold, vendors have a critical window of opportunity to redefine their product strategies, adapt to changing user behaviors, and lead the next generation of software innovation.
The pace of change is rapid. Development tools are evolving from AI-augmented helpers into AI-driven and AI-native platforms within months, not years. Organizations are increasing investment in AI-powered coding tools and AI agents, with spending growth exceeding 75% in many categories. This shift isn’t limited to developers. Platform engineering, testing, infrastructure-as-code, and DevOps teams are all drawn into a new AI-empowered SDLC.
Futurum’s 2025 research shows that organizations plan to increase their spend on AI code generation (83%), AI-augmented (76%), and AI agent (76%) development tools over the next 12 to 18 months.
Figure 1: Accelerating AI Development Spending
“To capitalize on the AI-Native market opportunity, vendors must embrace agility and responsiveness while amplifying customer feedback,” says Futurum VP and Practice Lead, DevOps and Application Development Mitch Ashley. “Traditional long release cycles must give way to shorter, feedback-driven innovation loops. Preview features, early access programs, and tight customer feedback integration will be essential to stay ahead of evolving expectations.”
Critically, vendors must reframe their go-to-market strategies. Lock-in approaches are losing relevance as buyers test offerings from multiple vendors in parallel. Successful vendors will lower barriers to entry, support interoperability, and focus on delivering measurable value, especially in productivity, time-to-value, AI upskilling, and cost-effectiveness.
AI-Powered Development Models: Futurum identifies three evolving models of AI integration in software development: AI-augmented (evolutionary assistance via familiar tools), AI-driven (human-led workflows supported by autonomous agents), and AI-native (revolutionary tools where AI is central to development). While AI-native tools such as Cursor, Windsurf, GitHub Agent, and Replit are in the early stages of development, they promise transformative gains for greenfield projects and forward-looking teams. These include “vibe coding,” where developers provide intent and goals in natural language, and AI agents orchestrate the software creation process.
Changing Developer Skills: The developer’s role is also shifting. Instead of writing code directly, developers will increasingly act as orchestrators, guiding AI agents, validating their outputs, and integrating AI-generated components into larger systems. Debugging AI-generated code—often poorly understood by humans—will require new observability and reasoning tools, potentially powered by their own AI agents. Development platforms aimed at a broader audience than more technical developers, often referred to as “studio” products, will need to focus less on code and deliver a user experience targeted at non-technical audiences.
Generated Code Security: Security is another area in flux. While large language models (LLMs) can accelerate code generation, they do not yet reliably produce secure code. Vendors such as Snyk, GitHub, Amazon, and Tabnine are incorporating secure coding features, but the market remains open for meaningful innovation in AI-secured code generation and runtime protections.
Rapid Tool Innovation: AI-integrated development environments (IDEs) will continue to evolve, moving beyond code creation to agentic workflow management and AI-informed design & architecture. A new generation of tools will manage workflows across agents, enforce permissions, provide runtime observability, and integrate contextual knowledge graphs, offering challenges and opportunities for vendors.
The full report is available via subscription to Futurum Intelligence’s DevOps and Application Development IQ service—click here for inquiry and access.
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Author Information
Mitch Ashley is VP and Practice Lead of DevOps and Application Development for The Futurum Group. Mitch has over 30+ years of experience as an entrepreneur, industry analyst, product development, and IT leader, with expertise in software engineering, cybersecurity, DevOps, DevSecOps, cloud, and AI. As an entrepreneur, CTO, CIO, and head of engineering, Mitch led the creation of award-winning cybersecurity products utilized in the private and public sectors, including the U.S. Department of Defense and all military branches. Mitch also led managed PKI services for broadband, Wi-Fi, IoT, energy management and 5G industries, product certification test labs, an online SaaS (93m transactions annually), and the development of video-on-demand and Internet cable services, and a national broadband network.
Mitch shares his experiences as an analyst, keynote and conference speaker, panelist, host, moderator, and expert interviewer discussing CIO/CTO leadership, product and software development, DevOps, DevSecOps, containerization, container orchestration, AI/ML/GenAI, platform engineering, SRE, and cybersecurity. He publishes his research on FuturumGroup.com and TechstrongResearch.com/resources. He hosts multiple award-winning video and podcast series, including DevOps Unbound, CISO Talk, and Techstrong Gang.
