The Rise of AI-Native ERPs: Startup Challengers and Legacy Defensive Counter-Offensives

The Rise of AI-Native ERPs: Startup Challengers and Legacy Defensive Counter-Offensives

The Enterprise Resource Planning (ERP) and core business software markets are undergoing a fundamental structural transition in 2026. As AI-native ERP startups gain rapid traction by automating core workflows, legacy software giants are aggressively overhaulng their business models, shifting from traditional per-seat licensing to consumption-based, credit-driven pricing. This transition is motivated by a stark economic reality: agentic AI is actively compressing the human seat counts that historically drove SaaS revenues.¹

The Startup Challengers: Fast Migrations and Massive Funding

A new class of venture-backed, AI-native ERP platforms has emerged to challenge legacy dominance by targeting high-growth startups and mid-market enterprises. Rather than retrofitting AI onto decades-old database architectures, these challengers build AI directly into the general ledger, allowing for real-time data connections, automated journal entries, and natural language financial querying.

• DualEntry: In October 2025, DualEntry emerged from stealth with a $90 million Series A funding round led by Lightspeed Venture Partners, Khosla Ventures, and GV (Google Ventures). The startup's core differentiator is its proprietary AI migration engine, which can onboard companies and migrate them from legacy systems like Oracle NetSuite in under 48 hours—eliminating the traditional 9-to-18-month implementation timeline that historically acted as a defensive moat for legacy vendors.
• Campfire: Campfire raised a $65 million Series B co-led by Accel and Ribbit in October 2025, bringing its total capital raised to over $100 million in just 12 weeks. Campfire reported 20x revenue growth in 2025, driven by its conversational "Ember AI" assistant that democratizes financial data access for non-finance team members.
• Rillet: Backed by Sequoia, Andreessen Horowitz, and ICONIQ, Rillet has raised $100 million across its Series A and B rounds. Rillet features native ASC 606 revenue recognition, syncing contract data directly from CRMs, making it a highly competitive alternative for pre-IPO SaaS and tech companies.

Legacy Defensive Counter-Offensives: The Pivot to Consumption and Credits

To defend against seat compression, legacy giants are rapidly introducing hybrid pricing models that monetize software based on "outcomes" and "actions" rather than user licenses.

1. SAP: The Shift to Metred "AI Units"

SAP has begun transitioning away from traditional per-user subscription licensing toward a consumption-based model. This shift is a direct response to AI agents automating workflows in finance, supply chain, and procurement, which structurally reduces the number of human users interacting with the ERP. In March 2026, SAP CEO Christian Klein stated:

"It would be foolish to still charge subscription base, because AI is so powerful that it will automate a lot of tasks." — SAP Shifts to AI Consumption Pricing

To monetize this automation, SAP uses SAP AI Units—a prepaid, expiring consumption currency. Each time a customer invokes Joule (SAP's generative AI assistant) or calls a BTP AI service, units are drawn from a finite pool. Standard contracts routines include baseline allocations that are often insufficient for production workloads, forcing customers into expensive overage rates (typically 2x to 4x the contracted rate). To support this data-heavy, agent-driven execution, SAP announced its acquisition of cloud-native master data management provider Reltio in early 2026.

2. Workday: The Launch of "Flex Credits"

Effective May 30, 2026, Workday is implementing a significant pricing shift by introducing Flex Credits, a universal consumption-based currency. Rather than purchasing fixed access to specific features, customers consume credits based on the work their AI agents (under the Workday Illuminate AI umbrella) perform in production. According to a rate analysis by Commit Consulting:

• 1–10 Credits/Action (Everyday AI): Simple self-service Q&A, business process optimization, and payroll data monitoring.
• 10–60 Credits/Action (Analytical AI): Payroll compliance analysis, frontline shift management, and audit sample requests.
• 60–750 Credits/Action (Complex AI): Talent rediscovery across candidate pools, contract redlining, and internal talent matching.

This "FinOps for AI" model shifts financial risk from Workday to the buyer, as over-purchasing leads to unused expiring credits, while under-purchasing limits access to operational capabilities.

3. Salesforce: Multi-Model "Agentforce" Monetization

Salesforce has moved away from its initial flat rate of $2 per conversation for Agentforce (launched in late 2024), introducing a tiered and highly granular monetization structure in late 2025/2026:

• Flex Credits: Sized at $500 per 100,000 credits, where standard agent actions cost 20 credits ($0.10) and voice actions cost 30 credits ($0.15).
• Pay-Per-Conversation: Retained at $2 per conversation for long-running, external customer support sessions.
• User Add-ons: $125 to $150 per user/month for unlimited internal AI assistance.

4. Oracle NetSuite: The Per-User Contrarian Play

In contrast to SAP, Workday, and Salesforce, Oracle NetSuite is actively countering the consumption narrative by keeping its AI features bundled "for free" within traditional user subscriptions to drive adoption. At SuiteConnect NYC in February/March 2026, NetSuite Founder and EVP Evan Goldberg argued that AI will actually expand user seats:

"In some cases, I think AI's ability to use the system more effectively with little or no training is actually going to increase your user count. More people will want to use NetSuite when they see how easy it is with AI... Our philosophy going in right now is first, we're just going to make sure everybody has AI... It's not an imminent threat to our costs or revenues, and so we're taking an approach of letting everybody in for free." — Oracle NetSuite Counters the AI Investor Narrative

NetSuite is rolling out NetSuite Next (first announced in October 2025), which integrates an agentic enterprise assistant interface (powered by "Ask Oracle" tech) on a per-user adoption basis, betting that simplifying the ERP experience will expand the system's reach deeper into customer organizations.