The worldwide enterprise application market is approaching $700 billion, but artificial intelligence is not producing uniform growth across the software industry. Instead, the latest financial results show AI investment concentrating around workflow automation, collaboration, finance and IT service management while customer-service and human-capital-management applications expand more slowly.
IDC report on enterprise application market size indicated that revenue growth was 11.5 percent in 2024 and 12.1 percent in 2025. An analysis of the latest earnings from 60 publicly traded application software companies — comprising 20 large-cap, 20 mid-cap and 20 small-cap vendors — indicates blended growth of approximately 13 percent halfway through 2026.
A one-percentage-point acceleration across a market approaching $700 billion represents billions of dollars in additional annual spending. However, growth has not yet reached the broad inflection point anticipated after the rapid adoption of generative and agentic AI.
The aggregate figure conceals a widening divide. Atlassian, ServiceNow and monday.com are growing above 20 percent, while Workday remains near 13 percent and several customer-experience platforms are expanding in the single digits or contracting.
Atlassian Revenue Jumps 28% to $1.77 Billion
Atlassian quarterly financial results show that workflow and collaboration software remains one of the strongest enterprise application categories.
Atlassian generated $1.766 billion in revenue during its fiscal fourth quarter of 2026, increasing 28 percent from $1.384 billion a year earlier. Cloud revenue climbed 31 percent to $1.213 billion, demonstrating that customers are directing more spending towards cloud-based collaboration, software development and service-management workflows.
For fiscal 2026, Atlassian’s total revenue increased 26 percent to $6.572 billion, compared with $5.215 billion in fiscal 2025.
Atlassian ended June 2026 with more than 350,000 customers, including over 85 percent of the Fortune 500. Trailing-12-month revenue reached approximately $6.6 billion, representing growth of 26 percent.
Atlassian’s remaining performance obligations increased 44 percent to approximately $4.8 billion, providing visibility into future subscription revenue.
Usage of Atlassian’s Model Context Protocol server and Teamwork Graph command-line interface exceeded 1 million monthly active users, more than doubling during a single quarter. This is an important signal because it shows AI adoption moving beyond product announcements into tools used by developers and enterprise teams.
Atlassian’s results support IDC’s finding that enterprise portals grew nearly 17 percent in 2025. Collaboration platforms offer extensive opportunities to embed AI into project planning, software development, enterprise search, knowledge discovery, incident management and workflow coordination.
ServiceNow AI Contract Value Exceeds $1 Billion
ServiceNow Q2 2026 financial results indicate that ServiceNow offers stronger evidence that customers will pay for AI when it is connected to critical workflows.
The company generated second-quarter 2026 subscription revenue of $3.877 billion, an increase of 24.5 percent. Total revenue rose 24 percent to $3.987 billion.
ServiceNow’s AI products exceeded $1 billion in annual contract value during the quarter. Agentic deployments increased nine-fold in nine months, indicating rapid enterprise adoption of autonomous workflow capabilities.
ServiceNow reported $13.2 billion in current remaining performance obligations, up 21 percent. Total remaining performance obligations reached $29 billion, increasing 21 percent.
The company signed 123 transactions worth more than $1 million in new annual contract value, nearly 40 percent more than a year earlier. It ended the quarter with 658 customers generating more than $5 million in annual contract value, an increase of approximately 23 percent.
These figures show that ServiceNow’s growth is being supported by large enterprises expanding their use of workflow software — not simply by smaller customers testing standalone AI tools.
ServiceNow increased its full-year 2026 subscription revenue forecast to between $15.76 billion and $15.78 billion, representing growth of 22.5 percent. Third-quarter subscription revenue is expected to reach $3.975 billion to $3.980 billion, up 20.5 percent.
The company’s growth is consistent with the argument that AI generates revenue fastest when attached to IT operations, security, risk management, employee workflows and customer-service processes with measurable outcomes.
monday.com Revenue Rises 22% as AI Generates 17% of New ARR
monday.com Q2 2026 financial results indicated that it generated $364.6 million in second-quarter 2026 revenue, up 22 percent.
Annual recurring revenue from monday.com’s AI products doubled from the first quarter and represented 17 percent of net new ARR during the second quarter. This provides a direct link between AI adoption and incremental software spending.
The number of paid customers with more than 10 users increased 6 percent to 65,783, from 61,803 a year earlier. Larger customer groups expanded considerably faster:
Customers generating more than $50,000 in ARR increased 31 percent to 4,834, from 3,702.
Customers exceeding $100,000 in ARR rose 37 percent to 2,019, from 1,472.
Customers above $500,000 in ARR jumped 68 percent to 114, from 68.
Customers with more than 10 users produced 82 percent of total ARR, up from 80 percent. Accounts generating more than $50,000 represented 43 percent of ARR, compared with 38 percent a year earlier.
Customers above $100,000 increased their contribution from 26 percent to 30 percent of ARR, while those exceeding $500,000 represented 7 percent, up from 5 percent.
monday.com’s remaining performance obligations increased 34 percent to $937 million, from $699 million. Current remaining performance obligations advanced 27 percent to $750 million, from $588 million.
monday.com expects third-quarter revenue of $368 million to $370 million, representing growth of 16–17 percent. Full-year revenue is projected at $1.466 billion to $1.474 billion, increasing 19–20 percent.
Workday AI Drives More Than 25% of New Contract Value
Human capital management is expanding more slowly than collaboration and IT workflow software, but Workday’s latest results suggest AI is beginning to influence new contracts.
Workday generated $2.649 billion in fiscal second-quarter 2027 revenue, up 12.8 percent. Subscription revenue rose 13.9 percent to $2.471 billion.
This performance is close to the 13.5 percent growth recorded by Workday in early 2026 and IDC’s 13 percent growth rate for the HCM application category in 2025.
However, AI produced more than 25 percent of Workday’s annual contract value in the latest quarter. More than 5,500 customers were using at least one Workday-built AI agent, an increase of more than 35 percent from the previous quarter.
Workday delivered 1.7 billion AI actions across its platform during fiscal 2026, showing that usage is scaling even though the company’s total growth rate remains near the broader application-market average.
The company serves more than 11,500 customers globally, including over 7,000 core Workday Financial Management and Workday HCM customers.
Its 12-month subscription revenue backlog increased 14.2 percent to $9.034 billion. Total subscription backlog reached $27.403 billion, growing 8 percent.
Workday expects fiscal 2027 subscription revenue of $9.94 billion to $9.95 billion, representing 13 percent growth.
BILL Core Revenue Grows 16% as Transactions Reach $98 Billion
Finance automation is another application category benefiting from workflow-based software adoption.
BILL generated fiscal fourth-quarter 2026 revenue of $436.2 million, up 14 percent. Core revenue, comprising subscriptions and transaction fees, rose 16 percent to $400.5 million.
BILL’s subscription revenue increased 11 percent to $76.2 million, while transaction revenue climbed 17 percent to $324.3 million. Float revenue contributed another $35.7 million.
For the full fiscal year, BILL’s revenue reached $1.653 billion, increasing 13 percent. Core revenue rose 16 percent to $1.505 billion, including subscription revenue of $293.5 million, up 8 percent, and transaction revenue of $1.211 billion, up 18 percent. Float revenue totalled $148.4 million.
BILL served approximately 479,300 businesses at the end of the quarter. Its platform processed $98 billion in payment volume, an increase of 14 percent, across 37 million transactions, also up 14 percent.
Its standalone network reached 9.2 million members that had originated or received an electronic payment, an increase of 11 percent.
Customer-Service Software Growth Remains Weak
Not all categories exposed to AI are accelerating.
Sprinklr reported growth of only 6.8 percent in its latest quarter and indicated that growth could slow to approximately 1 percent in the following quarter. LivePerson’s revenue declined 12 percent.
Customer-service applications should theoretically be among the greatest beneficiaries of generative and agentic AI. Automated agents can answer customer questions, summarise interactions, route requests and resolve routine problems without direct human intervention.
However, traditional customer-service application revenue may face cannibalisation as AI reduces the number of human agents requiring paid seats. A vendor could deliver greater automation value while reporting slower licence growth if its pricing remains connected primarily to employee numbers.
The same risk exists in HCM. AI can automate recruitment, candidate screening, employee support and workforce administration, but those efficiencies will not necessarily increase revenue if the new capabilities remain bundled into existing subscriptions.
AI Pricing Matters More Than Product Announcements
The difference between ServiceNow, monday.com and slower-growing application providers shows why CIOs should examine AI pricing alongside functionality.
Technology buyers need to determine whether an AI capability is permanently included in the existing subscription, sold through a separate tier, priced according to usage or charged based on completed outcomes. A feature provided without additional cost today could become a paid product after customers make it essential to their workflows.
Enterprise buyers should seek written commitments covering pricing, usage limits, renewal increases and eligibility for grandfathered plans. This is particularly important before deploying AI capabilities across multiple departments.
ServiceNow’s $1 billion of AI annual contract value, monday.com’s 17 percent contribution from AI products to net new ARR, and Workday’s more than 25 percent AI contribution to new ACV provide stronger evidence of commercial adoption than general claims about AI roadmaps.
Enterprise Software Growth Is Splitting by Category
The enterprise application market’s expansion from 11.5 percent in 2024 to 12.1 percent in 2025 and approximately 13 percent in 2026 does not show a cloud-style surge at the aggregate level.
Category-level performance tells a different story. Atlassian grew 28 percent, ServiceNow expanded 24 percent, monday.com increased 22 percent and BILL’s core revenue rose 16 percent. Workday remained close to the HCM category rate at 12.8 percent, while Sprinklr grew 6.8 percent and LivePerson declined 12 percent.
AI is therefore influencing enterprise applications, but it is doing so unevenly. Workflow-rich platforms that attach AI to collaboration, IT operations and financial transactions are translating adoption into revenue more quickly.
The most useful indicator is no longer whether a vendor offers AI. It is whether customers are paying for it through new contracts, increased usage, higher transaction volumes or expanded annual recurring revenue. On that measure, the enterprise application market is not moving as one — it is separating into clear AI winners, slower adapters and vendors whose traditional seat-based pricing may be concealing the value their technology creates.
RAJANI BABURAJAN
